IG Markets Afternoon thoughts

IG Markets Afternoon thoughts

Across Asia, regional markets are mainly higher after Wall Street again managed to eke out modest gains overnight. The Nikkei 225 is the region’s best performer, higher by 1%, while the Hang Seng and the Kospi are seeing gains of 0.5% and 0.1% respectively. Elsewhere, the Shanghai Composite is bucking the trend to be lower by 0.6%.

In Australia, the ASX 200 is currently 0.3% firmer at 4194, just off its session high of 4203. Once again, the market is lacking the impetus to make a sustained assault above 4200, and with it being Friday afternoon there appears little interest in establishing new positions heading into the weekend. Performance across the market today is mixed, with gains across the energy, materials and industrial sectors being offset by losses for the consumer staples, information technology and healthcare sectors.

As we alluded to this morning, the ASX 200 has continued to face tough resistance around the 4200 level. Unfortunately the local market is just lacking the conviction to move higher from these levels. Perhaps there is just too much uncertainty and investors can’t be tempted despite the attractive fundamental valuations on offer.

Tonight will be an interesting one in the US. US investors managed to shrug off the slightly disappointing economic data from last night and edge stocks higher. The S&P finished above its previous high of 1292, closing at 1295, and all eyes tonight will be watching to see if it can crack 1300. Pre-market JP Morgan kicks off the financial reporting season and with consensus forecasts having been significantly pared back, the bank has a real opportunity to surprise on the upside, particularly as it has a strong track record in doing so.

ENDS

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