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Market Brief: Asian Stocks Mostly Lower, ASX 200 Down On Dismal Employment Data

Asian markets trading mostly lower after a late reversal in Wall Street as investors sold stocks amid a rise in the number of new COVID-19 cases threatens the fast recovery in the global economy. New infections rising in California and Texas while China cancelled many flights in an attempt to contain a second coronavirus wave. Any new lockdown measures will halt the economic recovery in the USA and China.

Geopolitical tensions also rise, after border conflicts between North and South Korea, and between India and China.

Jay Powell in the second day of his testimony warned on uncertainty about the strength and duration of the U.S. recovery, but he reiterated that the central bank will do whatever it takes to help the U.S. economy during the coronavirus crisis.

Wall Street gave up early gains and finished lower. Dow Jones was 0.65% lower at 26,119, S&P 500 ended 0.36% lower at 3,113. Nasdaq finished 0.15% higher at 9,910.

Investors await today the Weekly Jobless claims with analysts expecting a slow improvement. The Bank of England (BOE) is expected to keep interest rates unchanged but will increase the QE by at least 100 billion.

Fitch Ratings agency cut India’s outlook from to ‘negative’ from ‘stable’ maintained India’s rating at the lowest investment grade of ‘BBB-‘.

The New Zealand Gross Domestic Product came in at -1.6%, below the expectations of -1% in the first quarter.

In Asia today, Nikkei is 0.45% lower at 22,355 Yesterday the Bank of Japan kept Interest Rate unchanged at -0.1%. The Hang Seng Index is 0.22 lower at 24,430. The Shanghai Composite index is 0.15% higher at 2,940 while the Singapore Straits Times index is 0.27% higher at 2,676.

Download our Q2 Market Global Market Outlook

ASX 200 Lower As Unemployment Rate Hit Highest Level Since 2001

ASX 200 is weaker today, giving up 0.92% at 5,936 as investors disappointed by weak employment data. The Australian employment in May fell by 227,700 with the unemployment rate up to 7.1% the highest level since October 2001. Analysts expectations were for 79,000 jobs lost and the unemployment rate at 6.9%. Both full-time and part-time employment drop. The Participation Rate dropped to 62.9% below the expectations of 63.7%. 

On the technical side, first support for the ASX 200 index will be met at 5,888 the daily low, while the 100-day moving average will provide extra support at 5,861. In case of a move lower than 5,861, sellers might test the next support area at 5,719 the low from June 16 trading session.

On the other side, first resistance for ASX 200 stands at 5,991 the daily top. Next resistance will be met at 6,147 the high from June 11. If the ASX index breaks higher, then the next supply zone stands at 6,304 the 200-day moving average.