European Open: Bullish equity sentiment looks past weak China PMI report

Asian Indices:

• Australia's ASX 200 index rose by 77.8 points (1.15%) and currently trades at 6,863.50
• Japan's Nikkei 225 index has risen by 445.27 points (1.64%) and currently trades at 27,550.47
• Hong Kong's Hang Seng index has risen by 117.85 points (0.79%) and currently trades at 14,980.91
• China's A50 Index has fallen by -75.18 points (-0.66%) and currently trades at 11,294.25

 

UK and Europe:

• UK's FTSE 100 futures are currently up 21 points (0.3%), the cash market is currently estimated to open at 7,068.67
• Euro STOXX 50 futures are currently up 16 points (0.44%), the cash market is currently estimated to open at 3,629.02
• Germany's DAX futures are currently up 58 points (0.44%), the cash market is currently estimated to open at 13,301.33

 

US Futures:

• DJI futures are currently down -6 points (-0.02%)
• S&P 500 futures are currently down -20.5 points (-0.18%)
• Nasdaq 100 futures are currently down -3.5 points (-0.09%)

 

 

Asian equities traced Wall Street higher on hopes that the Fed will hint at a slowdown the pace of their interest hikes. Money markets estimated an 80.3% chance of a 75bp hike on Friday, down from over 100% around a week ago.

China’s manufacturing PMI slipped to 49.2 and services fell to 48.1 to show both sectors are contracting. Given parts of China are once again back in lockdown and with no sign of a covid-zero policy coming to lights, it’s doubtful a positive number would have lifted sentiment much anyway. But the Hang Seng took notice as it fell to a fresh 15-month low, although minor gains were achieved later in the session as it took a tailwind from global equity sentiment.

 

DAX daily chart and implied volatility:

The DAX has been teasing trades with a break of trend resistance yet has fallen short of doing so. However, Friday’s bullish engulfing candle shows promise that it may finally break higher. The market has also helped above 13k for the past three days, so the bias remains bullish above this level and for a move towards the 13,500 resistance.

 

FTSE 350 – Market Internals:

FTSE 350: 3893.43 (-0.37%) 28 October 2022

• 74 (21.14%) stocks advanced and 265 (75.71%) declined
• 0 stocks rose to a new 52-week high, 8 fell to new lows
• 18.86% of stocks closed above their 200-day average
• 44% of stocks closed above their 50-day average
• 24.57% of stocks closed above their 20-day average

 

Outperformers:

• + 5.84% - Airtel Africa PLC (AAF.L)
• + 5.09% - Centrica PLC (CNA.L)
• + 3.42% - Telecom Plus PLC (TEP.L)

 

Underperformers:

• -11.30% - ASOS PLC (ASOS.L)
• -9.21% - Natwest Group PLC (NWG.L)
• -5.38% - Jupiter Fund Management PLC (JUP.L)

 

 

Economic events up next (Times in BST)