Morning Brief: Hang Seng, Nikkei 225 Advances as Dow Jones, DAX Index Retreats
Asian stocks are mixed today as investors react to the latest developments on the coronavirus vaccine. In Hong Kong, the Hang Seng is up by more than 0.45% while in Japan, the Nikkei 225 index is up by 0.25%. In China, the Shanghai composite has fallen by 0.50%.
Real estate developers are the best-performing stocks in the Hang Seng today. Wharf Real Estate, Link Real Estate, Swire Pacific, New World, and CK Asset have all jumped by more than 7%. That is mostly because a Covid vaccine will help their real estate portfolio by boosting travel to Hong Kong again. Other top performers in the Hang Seng are CNOOC, HSBC, and AIA Group.
ANA holdings, the biggest airline in Japan, is the best-performing in the Nikkei 225. That is because a virus will boost confidence in international travel, where the company does most of its business. Other leading companies in the Nikkei are Yamaha, J.Frost, West Japan Railway, and East Japan Railway.
In Europe, futures tied to the FTSE 100index are down by more than 1.50% while DAX index futures have fallen by more than 0.50%. This action is mostly because investors are worried about distribution of the new Covid vaccine by Gilead. Analysts warn that this process could take a few years. Among the European companies to watch in the DAX index today will be Adidas, Deutsche Post, Henkel, and Infineon. Those to watch in the FTSE 100 will be LandSec, Persimmon, and Meggitt.
In the United States, Dow Jones, S&P 500, and Nasdaq 100 futures are all in the red after a powerful rally yesterday. The three are all down by more than 0.50% mostly because of concerns about vaccine distribution. They are also falling because of the decision by Attorney General William Barr to allow Trump’s suits on election fraud.
Hang Seng technical analysis
The Hang Seng index rose to an intraday high of $26,794 and then erased most of those gains and is now trading at $26,145. On the daily chart, this price is slightly below the July high of $26,795. It remains above the 25-day and 50-day moving averages. It is also slightly above the 61.8% Fibonacci retracement level. (This retracement connects the highest and lowest levels this year.)
Therefore, I suspect that the uptrend will remain because of the outcome of the US election and the Covid vaccine. The next level to watch will first be the July high of $26,795 followed by $27,000. On the flip side, a move below the 50% retracement at $25,000 will invalidate this trend.