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

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news