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

 


Nervous start for stocks

Weaker US markets and ongoing commodity declines makes for a nervous start for stocks


By Ric Spooner (Chief Market Analyst, CMC Markets)

We are likely to see some further risk reduction and selling pressure this morning as the market heads into the profit reporting season. Mixed profit results combined with relatively high valuations in some of major US stocks, especially in the tech sector has seen ongoing selling in the US market that is adding to international stock market nervousness due to concerns over emerging markets.

Although China’s official PMI was in line with expectations with a read of 50.5, it shows ongoing declines in export orders and manufacturing employment that will do little to arrest current negative sentiment towards the emerging market sector. This was evident in ongoing weakness in commodity prices which will weigh on sentiment towards resource stocks this morning. Today’s release of China’s services sector PMI may further influence investor thinking on the state of China’s economy.

Investor attention will also be focussed on this morning’s building approval statistics. Recent figures have suggested that low interest rates and improving confidence are finally leading to a situation where dwelling starts are growing to meet the housing backlog. The market will be looking for this to continue as an area of potential strength for the Australian economy.

The key question for technical analysts at present is whether current weakness in the ASX 200 index is merely a correction of the rally from 5028 to 5381 or the start of something larger. A move below 5028 would resolve this issue in favour of potential for a larger corrective decline. In the meantime, the 200-day moving average around 5145 represents near term support while the 20-day moving average provides resistance at 5277.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news