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

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news