European Open: Asian Markets Trade Lower as Evergrande Falls 18%

Bears controlled the overnight session ahead of a busy week of central bank meetings and economic data, as China’s second largest property group fell nearly 20%.

Stocks (1)

Asian Indices:

  • Australia's ASX 200 index fell by -144.2 points (-1.95%) and currently trades at 7,259.50
  • Hong Kong's Hang Seng index has fallen by -979.11 points (-3.93%) and currently trades at 23,941.65

UK and Europe:

  • UK's FTSE 100 futures are currently down -23 points (-0.33%), the cash market is currently estimated to open at 6,940.64
  • Euro STOXX 50 futures are currently down -26.5 points (-0.65%), the cash market is currently estimated to open at 4,104.34
  • Germany's DAX futures are currently down -99 points (-0.64%), the cash market is currently estimated to open at 15,391.17

US Futures:

  • DJI futures are currently down -166.42 points (-0.48%)
  • S&P 500 futures are currently down -80 points (-0.52%)
  • Nasdaq 100 futures are currently down -31.25 points (-0.71%)


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Indices

Public holidays in Japan, China and South Korea meant trading volumes were lower during the Asian session, and China is also on a public holiday tomorrow. For the markets that were open, sentiment remained fragile with a weak lead from US markets on Friday and woes surrounding Evergrande Group. The stock fell as much as -18% today (currently down 16.9%), taking its YTD declines to -85.9%. The Hang Seng was the weakest performer with a -4.1% decline during its most bearish session in nearly 2-months.  The ASX 200 fell -1.9% and hit a 2-month low.

US futures markets are lower, with the S&P 500 E-minis contracts falling as much as -0.8% overnight. Having met resistance at its 50-day eMA the next support level for bears to target is around the 4347.75 low.

The FTSE 100 is also on the back foot after the index closed below 7,000 on Friday. The 200-day eMA around 6880 and lows around 6812/23 are next support levels for bears to conquer, and our bias remains bearish below 7000.


FTSE 350: Market Internals


FTSE 350: 4035.76 (-0.91%) 17 September 2021

  • 164 (46.72%) stocks advanced and 180 (51.28%) declined
  • 17 stocks rose to a new 52-week high, 14 fell to new lows
  • 69.52% of stocks closed above their 200-day average
  • 54.7% of stocks closed above their 50-day average
  • 16.24% of stocks closed above their 20-day average

Outperformers:

  • + 9.11%   -  Restaurant Group PLC  (RTN.L) 
  • + 5.99%   -  Tui AG  (TUIT.L) 
  • + 5.81%   -  Darktrace PLC  (DARK.L) 

Underperformers:

  • -8.07%   -  Anglo American PLC  (AAL.L) 
  • -7.14%   -  Oxford BioMedica PLC  (OXB.L) 
  • -4.80%   -  BHP Group PLC  (BHPB.L)

 

Forex:

The New Zealand dollar fell to a 3-week low overnight after its business PSI contracted at its fastest rate since April 2020. Falling to 34.5 from 56.8 means the -22.3 point drop is its fastest on record. With Auckland remaining in level 4 lockdown it’s unlikely we will see a sharp comeback next month, although daily cases are now -28% from their peak so they do appear to be on the path to recovery.

GBP/JPY fell to a 3-week low after breaking 150.83 support. The Japanese yen and US dollar remained firm due to safe-haven flows, and AUD and CAD are currently the weakest major currencies.


GBP/USD has broken below its 200-day eMA overnight after breaking trend support on Friday. It’s fallen around -1.5% since its September high, which still leaves around -0.75% until it reached the August low. Our bias remains bearish below 1.3765 although today’s high could also be used to fine tune risk management.


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Commodities:

Copper futures fell in line with appetite for risk, with prices currently probing the July low and trading at their lowest level in 4-weeks. We may see some follow through today if sentiment remains weak as traders across Europe and US respond to overnight moves.

Gold prices are traded below 1750 overnight, although prices have gone on to trade back above it by the close over the previous two days.

Oil prices continued lower for a third consecutive day, although not at an alarming rate. We continue to suspect the current price action is corrective, so looking for a base to form around or above $70.


Up Next (Times in BST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


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