ASX

Market Brief: ASX 200 AND Asian Markets Turn Lower On Profit Taking

Asian stocks retreat today as investors are taking some profits off the table after yesterday’s rally that drove the major indices to almost five-month highs. The rally in Chinese stocks improved investors sentiment for a fast global recovery despite the rising number on new coronavirus cases in some U.S. states. Australia and many U.S. states re-closed the restaurants and bars on a record number of new infections during the 4th of July weekend.

Wall Street ended with hefty gains while Nasdaq made another all-time high after better than expected economic data. The U.S. ISM Non-Manufacturing PMI came in at 57.1 topping the analyst’s estimates of 50.1 in July. The ISM Non-Manufacturing New Orders Index registered in at 61.6 also above the forecasts of 44 in June. The ISM Non-Manufacturing Employment Index registered in at 43.1, topping the estimates of 30.7. The Services PMI registered in at 47.9, beating the analyst’s expectations of 46.7 in June. The PMI Composite came in at 47.9, topping the estimates of 46.8.

Nikkei 225 finished 0.44% lower at 22,614. Japan, Leading Economic Index, came in at 79.3 above the forecasts of 73.2 in May.

The Shanghai Composite index continues higher, adding 1.24% at 3,374. The Singapore Straits Times index is 0.44% lower at 2,677. Hang Seng is 0.53% lower at 26,206.

ASX 200 Pare Gains RBA Keeps Rates Unchanged at 0.25%

ASX 200 gave up early gains and finished 0.03% lower at 6,012 amid rising fears of a second coronavirus wave. RBA kept interest rates unchanged at 0.25% matching analyst’s expectations. There have been 17 rate cuts since November 2011 with the interest rate cut from 4.75%. The central bank noted that the outlook remains uncertain and the recovery is expected to be bumpy, but the conditions have stabilised recently, and the downturn has been less severe than previous estimates. 

On the technical side, immediate support for the ASX 200 index will be met at 6,004 the daily low. In case of a break lower than 6,004, sellers might test the next support area at 5,933 the low from July 2. The 100-day moving average at 5,722 would provide the next support zone.  

On the other side, the first resistance stands at 6,077 the daily top. Next hurdle for ASX 200 will be met at 6,106 the high from July 3 trading session. If the ASX index breaks higher, then the next supply zone stands at 6,258 the 200-day moving average. 

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ASX 200 Daily Chart

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