Not quite a bath of blood, but its been a red day across Asian stock markets in the delayed weekend response to the tremendous selloff on Wall Street on Friday night. Chinese stocks are leading the way down this time with the Shanghai Composite closing 1.2% lower to 2863 points while the Hang Seng Index is off even more, down more than 2% to 25530 points. Price has gapped down well below the low moving average on the daily chart, and look set to return to the terminal low just below 25000 points:
Japanese share markets are following the poor lead with the Nikkei 225 closing over 2% lower to 20261 points, not helped at all by a very volatile Yen, with the USDJPY pair gapping down on the open and then surge nearly 100 pips higher before returning to hover just above the 105 handle going into the City open. A fun day for day traders but no one else:
The ASX200 didn’t fall as much as expected, clawing back a poor open to close only 1.3% lower at 6440 points, but its a worrisome break down. The Australian dollar is sending even worse signals, falling sharply below the 67 handle to almost a monthly low, matching but not breaking below the recent terminal low:
S&P and Eurostoxx futures are off by more than 2% and 1.4% respectively, so the pain isn’t over yet. The S&P500 four hourly chart clearly showing price wanting to breach the former lows at the 2830 points level, having now rejected significant resistance at the 2940 level:
The economic calendar starts the week with a very solid print to watch – let alone the G7 summit – and that’s the US durable goods orders for July.