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Market Brief: Stocks Higher Betting on More Chinese Stimulus

Nikkei 225 m
Nikkei 225

Asian indices run higher today as investors increased bets that China will intervene with cash injections to support the coronavirus struggling economy. New coronavirus cases in China continued to fall, with 1,749 new confirmed infections and 136 additional deaths. The coronavirus death toll has now passed 2,000. Wall Street managed to recover the morning losses after the warning from Apple Inc. that it will not match the quarterly revenue guidance due to supply disruption on iPhone and weaker demand from China.

The Asian equities finished mostly higher. Nikkei 225 closed up 0.89% at 23400. The Hang Seng Index is 0.40% higher at 27637 and the Shanghai Composite is 0.32% lower at 2975. The Singapore Straits times ended 0.58% higher at 3215. Aussie shares finished close to all-time highs with ASX 200 added 0.43% at 7144.

In our trading calendar, the UK Consumer Price Index (CPI) for January will be released at 9:30GMT. The Eurozone Current Account and Construction Output are all due at 10:00GMT. In the American calendar we have the Building Permits, Housing Starts, Producer Price Index (PPI), all to be released at 13:30GMT. The Canadian CPI will also be published at 13:30GMT.

Read our Best Trading Ideas for 2020.

Nikkei Higher on Better Than Expected Japan Exports

Nikkei 225 ended 0.89% higher at 23400 after the Exports (YoY) came in at -2.6% topping the expectations of -6.9% in January. That was the 14th consecutive month of a drop in exports while we expect that trend to continue amid the coronavirus outbreak. The technical outlook has improved after the index managed to rebound from the 100-day moving average.

On the upside first resistance for Nikkei 225 stands at 23468 daily top and then at 23628 the 50-day moving average.  More selling pressure might be met at 23744 the high from February 14th session.

On the downside initial support for the Nikkei index stands at 23235 the daily low. A credible break below would open the way for the next support at 23139 the 100-day moving average.