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

 


Caution likely as investors await developments in Crimea

Caution likely as investor await developments in Crimea and China


By Ric Spooner (Chief Market Analyst, CMC Markets)


The stock market looks likely to start the week with a soft tone. Investors are likely to follow the US lead, taking a cautious approach ahead of the West’s diplomatic response to the situation in Crimea. The nature of any sanctions announced will be a near term focus for markets. The potential for any increase in commodity prices and a reduction in the export revenues on which Russia is reliant are key issues.

Markets will also start the week with a watching brief on China’s economy. Following last week’s soft economic data and news that the trading band for the Yuan will be widened to 2%, markets now attach some probability to the possibility that authorities will move quickly to stimulate the economy with a cut to bank reserve requirements. While markets might have an initial positive reaction to this news, investors will also be conscious that any move by authorities could indicate the extent of their concerns over economic growth.

Despite background concerns over China’s economy, investors in the big resource stocks will appreciate confirmation that BHP will move to implement a buyback when its debt falls to $25bn. On current projections this looks likely to occur in the middle of this year and will be a supportive element for the largest stock in the index

At the end of the day, the S&P/ASX 200 index has gone nowhere so far in 2014. On Friday it finished down 0.4% on its 2013 close. This is not a surprising result given generally full valuations for a lot of stocks. From a technical point of view, one of the emerging possibilities is that the market is forming a large consolidation pattern. The fact that the index formed a peak at the same level as its last major peak in October creates the possibility that a large ascending triangle is forming. The boundaries of this formation would be the recent peaks at 5457 and an upward sloping trend line at around 5070. This represents a range of about 7% of the index. Closer by, the 38.2% Fibonacci retracement of the last major rally provides potential support around 5300.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news