Market Brief: Asian Markets Rally, ASX 200 Returns Above the 100-Day SMA

Summary:
• Asian stocks rally after the Federal Reserve announced that it would start purchasing U.S. corporate bonds in an attempt to secure liquidity for companies

Asian stocks rally after the Federal Reserve announced that it would start purchasing U.S. corporate bonds in an attempt to secure liquidity for companies and credit markets amid the coronavirus crisis. The news reversed early negative sentiment amid fear of a second coronavirus wave. Coronavirus cases surpassed 8 million as infections rise in Latin America, the United States and China.

Investors today will focus on Fed Chair Jerome Powell testimony before the Senate Banking Committee at 14:00 GMT.

Yesterday, Wall Street rebounded sharply after heavy losses during the premarket. The Dow Jones ended 0.62% higher at 25,763. The S&P 500 ended 0.83% higher at 3,066 while the Nasdaq finished 1.43% higher at 9,726.

The Nikkei is 4.68% higher at 22,542 after the Bank of Japan kept Interest Rate unchanged at -0.1%. The Hang Seng Index is 2.88 higher at 24,462. The Shanghai Composite index is 1.24% higher at 2,925, while the Singapore Straits Times index is 2.59% higher at 2,681.

The New Zealand Consumer confidence drops to the lowest level since 2009, as the Westpac McDermott confidence index fell 7 points to 97.2.
Crude oil price stabilizes today after yesterday’s volatile session. Brent crude oil is 0.21% higher at 39.89 per barrel, while the WTI crude oil is 0.48% higher at 37.23.

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ASX 200 Regains The 100-Day SMA

ASX 200 snapped three days of losses as investors cheered the new Fed intervention and on speculation for another relief package from the U.S. government. RBA minutes showed that the downturn in the Australian economy could be shallower than previous expectations. The Reserve Bank of Australia reiterated the commitment to maintain an accommodative approach for as long as required. RBA on June 2 kept interest rates unchanged at 0.25%.

On the upside, first resistance stands at 5,975 the daily high. Next hurdle will be met at 6,147 the high from June 11. If the index breaks higher, then the next supply zone stands at 9,200 the high from June 9.  

On the flip side, initial support for the ASX 200 index will be met at 5,884 the 100-day moving average. In case of a move lower, sellers might test the next support area at 5,719 the low from today’s trading session. Next support for the ASX 200 index will be met at 5,535 the 50-day moving average.