Opening Bell: Hang Seng, Nikkei 225 Spike as Global Stocks Start Month on a High
Hong Kong shares have started December on a high note. The Hang Seng, which tracks 40 of the biggest companies in the city, has risen by more than 1% on the first day of the month. Most of its constituent firms are in the green as optimism about a new vaccine rises. ICBC, Tencent, AIA, and Ping An Insurance are the best-performing stocks in the Hang Seng index today. The main laggards are Sino Biopharma, CNOOC, CSPC Pharma, and Henderson Land.
In Japan, the Nikkei 225 index has continued to soar after having one of the best months in recent years. Further to vaccine news, the blue-chip Japan index is rising because of the strong manufacturing PMI data from the country. In a report earlier today, Markit and au Jibun bank said that the PMI rose to 49, just a point below the important level of 50. It is also the highest it has been since January this year.
The best performers in the Nikkei are NTN Corp, SUMCO, Furukawa Electric and Toppan Printing. The laggards are Fuji Electric, Tokyo Gas, Rakuten, and Recruit Holdings.
In Europe, the DAX index has also started the month well. Futures tied to the index are up by 0.70% paring some of the 0.30% losses made yesterday. The index is soaring ahead of the important PMI and CPI data from Europe. These numbers will provide more colour about the bloc’ recovery.
However, the biggest risk for the DAX is that German politicians have started to question whether the country can afford more stimulus spending. This is after Olaf Scholz, the finance minister doubled the amount of borrowing to 180 billion euros. That’s in addition to the 280 billion euros it has already borrowed.
In the United Kingdom, the FTSE 100 index is also rising mostly because of optimism of a Brexit deal. The biggest story today will be about Philip Green’s Arcadia Group, which moved into administration yesterday. The decision puts more than 13,000 jobs at risk in one of the country’s biggest bankruptcies.
Elsewhere, in the United States, the Dow Jones, Nasdaq 100, and S&P 500 have all risen by more than 0.70%.
Hang Seng technical outlook
Our focus for today will be on the Hang Seng index, which is among the best-performing indices in the world. On the daily chart, the index has pared-back some of the losses made yesterday. The index is above the 61.8% Fibonacci retracement level.
It is also slightly below h$26,777, which was the highest point in July. It is also above the 25-day moving averages. Therefore, the upward trend will continue so long as the price is above the psychological-important level of h$26,000.