DOW JONES, HANG SENG AND ASX 200 INDEX OUTLOOK:

  • The Dow Jones, S&P 500 and Nasdaq 100 indices closed +2.00%, +2.57% and +3.58% respectively
  • Stock markets rebounded strongly as talks with Ukraine progressed. Crude oil fell
  • Asia-Pacific Equities open higher. Investors will watch US inflation data for more clues

Dow Jones, Market Rebound, Crude Oil, US Inflation, Asia Pacific Open:

Wall Street stocks bounced back suddenly overnight as dip buyers stepped in to hunt bargains after Russia said “some progress has been madein talks with Kiev to reach a ceasefire agreement. the German DAX the index soared 7.92% overnight, marking its biggest single-day gain in years. Safe havens such as gold, the US dollar and Treasuries have fallen, which has boosted risk appetite as investors may believe the Ukraine crisis and related sanctions may have already been integrated. Crude oil fell 12% amid profit taking as tensions in Ukraine eased.

Amazonsaw its share price soar 6.7% during aftermarket trading after the company announced a $10 billion stock split and buyout plan, which will remove barriers to its inclusion in the Dow Jones Industrial Average index.

Going forward, investors will focus on US inflation data will be released later today. The consumer price index (CPI) is expected to reach 7.9% in February, marking a new four-decade high. Core inflation, which strips volatile food and energy products, is expected to come in at 6.4%. If the actual readings exceed forecasts, investors could be even more worried about rising prices and their ramifications for wage pressure and corporate profit margins. Russia invasion of ukraine propelled commodity prices around the world, leaving economies to face a new wave of inflation in the months to come.

Source: Bloomberg, DailyFX at 9and March 2022

This will provide a difficult task for the fed and other central banks, which must meet rising prices with higher interest rates. On the other hand, heightened geopolitical risks and global supply chain disruptions could hamper the Fed’s roadmap for tightening. The FOMC meeting scheduled for next week will be watched closely by investors around the world.

crude oil prices reached its highest level since 2008 before falling sharply on Wednesday. This suggests that the US ban on Russian oil imports has likely been taken into account and traders are “selling the fact”. Falling oil prices could ease concerns about the negative impact on the economic recovery as the cost of energy and commodity prices decline. This is particularly good news for major oil-importing Asian countries like China, Japan and India.

Dow rebounds as demand for Haven wanes, crude oil tumbles.  The Hang Seng index could rise

Source: Bloomberg, DailyFX

that of Hong Kong Hang Seng Index (HSI) may embrace a rebound on Thursday after seeing a huge intraday price move the day before. The Norwegian sovereign wealth fund said it would divest its stake in the Chinese sportswear maker Lining, which is part of the Hang Seng index, due to suspected forced labor being used in Xinjiang province. Iyou the stock price plunged nearly 10%, sending shockwaves through the rest of the market. Meanwhile, Leading nickel producer in China TsingshanHoldingGroup would have obtained loans to help it meet margin calls in a context of historical shortage.

For the future, the ECB decision on interest rates dominates the economic agenda alongside and US Inflation Data. Find out more from the DailyFX Economic Calendar.

Looking back to Wednesday’s close, all 9 sectors of the S&P 500 ended higher, with 80.6% of the index constituents closing in the green. Information technology (+3.78%), financials (+3.71%) and materials (+3.39%) are among the best performers, while energy (-2.5%) ) is lagging behind.

Dow Jones Sector performance 09-03-2022

Dow rebounds as demand for Haven wanes, crude oil tumbles.  The Hang Seng index could rise

Source: Bloomberg, DailyFX

Dow Jones Technical analysis of the index

The Dow Jones Index may have formed a “Double Bottom” chart pattern as shown on the chart below. This suggests that the price may have hit a short-term low and can embrace a technical bounce. Holding above a key support level of 32,940 could open the way for further upside potential with an eye on 34,040. consecutive lows over the past few months.

Dow JonesIndex – Daily chart

Dow rebounds as demand for Haven wanes, crude oil tumbles.  The Hang Seng index could rise

Chart created with TradingView

Technical analysis of the Hang Seng index:

The Hang Seng Index (HSI) broke below several support levels and extended lower, underlining strong selling pressure. An immediate support level can be found at 20,830 – the 200% Fibonacci extension. Holding above this level could pave the way for a technical rebound. The MACD indicator dipped deep into negative territory, suggesting that prices could be seriously oversold.

Hang Seng Index – Daily chart

Dow rebounds as demand for Haven wanes, crude oil tumbles.  The Hang Seng index could rise

Chart created with TradingView

Technical analysis of the ASX 200 index:

The ASX 200 index formed a “Double Top” chart pattern and has since entered a technical correction. An immediate level of support can be found at 6,960 – the 23.6% Fibonacci retracement. Breaking below this level could intensify short-term selling pressure and expose the next support level of 6,758. A key resistance level can be found at 9,290, the previous high.

ASX 200 index – Daily chart

Dow rebounds as demand for Haven wanes, crude oil tumbles.  The Hang Seng index could rise

Chart created with TradingView

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitterr

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