Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Markets will remain nervous about debt in China

10.04 AEST, Monday 24 June 2013

Investors starting to see value in banks but markets will remain nervous about debt in China


By Ric Spooner (Chief Market Analyst, CMC Markets)

Investors are likely to start the new week cautiously as they gauge ongoing reaction to last week’s Fed announcement and concerns over the credit situation in China.

The valuation adjustment for tapering of Fed stimulus is well underway. While it may have further to go a substantial valuation adjustment has already occurred in the Australian market. The strength of buying in bank stocks off Friday’s lows and similar levels the week before suggests investors chasing dividend yield are starting to see real value around those prices.

Markets will be relieved at news of a sharp drop in short term interest rates in China at the end of last week. However, signs of a possible credit crunch last week have caused the market to take a closer look at the possibility that debt problems in China may in fact be sufficiently serious to lead to downward revisions in the outlook for economic growth. Consequently economic news from China and its money market conditions are likely to remain front and centre as a key driver of Asian stock markets.

From a technical point of view it would take a rally past the May high at 5249 to provide conclusive evidence that the downward correction has ended. Any rally we do see at this stage is more likely to be a corrective bounce in an ongoing move lower. The 200 day moving average represents near term resistance around 4760 with the 50 day average currently cutting in at about 5000. If we do ultimately see a deeper correction the 50 and 61.8% Fibonacci retracements of the 3985/5249 rally form a potential zone of support between about 4450 and 4600.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news