FTSE 100

Morning Brief: FTSE 100 and DAX Index set for flat open as Nikkei 225 drops

It is a mixed picture across Asian-Pacific stocks today as traders are focused on rapidly rising Coronavirus cases in the U.S., the upcoming Federal Reserve meeting, which starts today, as well as multiple earnings and U.S. stimulus proposals. In Japan, the Nikkei 225 index fell by 0.30% while in Australia, the ASX 200 index was down by 0.25%. In China, the Shanghai composite and Hang Seng rose by 0.30%.

Meanwhile, in Europe, futures tied to the DAX index, CAC 40, FTSE 100 and Stoxx 50 hardly moved. The same picture in the U.S., where futures tied to the Dow Jones and S&P 500 remained unchanged.

Hang Seng reacts to new tech benchmark

The Hang Seng index is up for a second consecutive day after Hong Kong’s stock exchange unveiled its new Hang Seng Technology Index, which tracks the biggest tech firms traded in the index. The index, which is directly competing with the more established Nasdaq 100, includes big names like Tencent Holdings, Meituan Dianping, Xiaomi as well as Alibaba. These firms make up a fourth of the total index.

Investors believe that Hong Kong is likely to become the default launchpad for Chinese tech firms, particularly as ongoing political tensions between the U.S. and China continue to increase. Today’s biggest gainers in the Hang Seng are China Mengniu Dairy, Tencent Holdings, HKEX, Techtronic Industries, and Shenzhou International.

Daiichi Sankyo helps Nikkei 225

The Nikkei 225 index is down today by more than 0.30% as automakers’ woes outweigh the positive news coming from Daiichi Sankyo. In a statement yesterday, AstraZeneca confirmed it plans to pay as much as $6 billion to acquire a cancer drug that is being developed by Daiichi Sankyo, one of the leading pharmaceutical drug companies in Japan. Under the agreed deal, an initial payment of $1 billion will be followed by $5 billion, if the drug proves to be efficient. Shares in the firm jumped up by more than 10%.

Meanwhile, car giants like Mitsubishi, Nissan and Hino fell sharply. Asian Nikkei said in a report that Nissan faced the possibility of running out of cash in the coming year. The company’s shares dropped by just over 3%.

Nikkei 225 vs Hang Seng
Nikkei 225 and Hang Seng 5-day chart

DAX index and other European equities unchanged

Futures tied to the DAX index and other European equities wavered. The DAX is down by 0.15%, while the FTSE 100 is up slightly, by 0.13%. Investors are waiting for corporate earnings from some major companies in Europe and the U.S., including Visa, McDonald’s, AIA Group, AMD, Mondelez, Altria, and Reckitt Benckiser. Reckitt is a member of the FTSE 100 index.

Gold price jumps to a new high

Meanwhile, after gold prices rose to a new high, the precious metal rapidly pared back the gains. Gold reached a high of $1,980 and is now trading at $1,972. Other metals – like silver and copper – also declined while the U.S. dollar index firmed.

The new price action is most likely a result of profit-taking, the ongoing negotiations on stimulus, as well as the upcoming Federal Reserve interest rate decision. Analysts anticipate that the Fed will leave interest rates unchanged and possibly signal more stimulus measures as the mood in the economy falters further.

Elsewhere, crude oil price is down by 0.30% while the Euro dipped by 0.20%. The British Pound Sterling also experiences a slight decrease, down by 0.18%, with the Canadian dollar also falling, by 0.10%.

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DAX Index, FTSE 100, CAC 40

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