Asian stock indices started the week mixed as investors trying to reaccess the risk from the coronavirus outbreak and the impact on the global economy. The Nikkei 225 index finished lower after Japan’s economy shrunk by 6.3% in the fourth quarter. Above that the Japan Industrial Production came in at 1.2%, below forecasts of 1.3% in December. Meanwhile, the Hang Seng Index is 0.58% higher at 27975 and the Shanghai Composite closed up 2.28% at 2983. The Singapore Straits times ended 0.23% lower at 3211.
On the coronavirus front the Hubei province in China confirmed 1,933 new cases of coronavirus and 100 new deaths as of February 16. PBOC in an attempt to ease the economic impact injected 200 billion yuan liquidity via 1-year medium-term lending facility. PBOC also cut the rate on MLF to 3.15%, from 3.25%.
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Nikkei 225 Outlook
Nikkei finished 0.69% lower at 23523 after weaker GDP data. The technical outlook is neutral now as the index today breached below the 50–day moving average.
On the downside first support for the index stands at 23336 the daily low. A break below might test the critical 100-day moving average at 23113. A break below will give the upper hand to bears targeting 22773 the low from February 3.
On the upside immediate resistance for Nikkei stands at 23562 daily high and then at 23634 the 50-day moving average.
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