Asian equities push higher on PBOC support

Wednesday, January 22, 2014

Asian stocks extended their rally during the overnight session as investors were encouraged by the continued decline in Chinese money market rates. The People’s Bank of China has taken significant steps to calm markets by increasing liquidity ahead of the Lunar New Year celebrations. Seven day repo rates settled at 5.3%, prompting a significant rally in both the Shanghai Composite and CSI 300 as they gained 2.16% and 2.58% respectively. Japanese indices managed to close in positive territory during overnight trading after the BoJ left monetary stimulus unchanged in a widely anticipated move. Markets were supported slightly higher after the release of Japan’s All Industry Activity Index, which gained 0.3% m/m in November from -0.2% the prior month. Both the Nikkei and TOPIX managed to register modest gains of 0.16% and 0.28% respectively.

US stocks struggled with direction yesterday on a lack of economic data which led to a 0.28% rise in the S&P 500, snapping a two day decline, while the DJIA lost 0.27% on a string of weaker corporate earnings. Alcoa opened 3.7% higher and gained a further 3% throughout the session after an upgrade from JPMorgan.

LME nickel prices resumed gains yesterday as three month contracts closed 1.16% higher after Monday’s session saw intraday prices drop back towards the 200 day MA. However, investor appetite remained firm as prices quickly recovered back towards $14,550 with yesterday’s session building on this level as contracts closed at $14,725/tonne. Prices seem to be well supported by the recent imposition of Indonesia’s ban on unrefined mineral ore exports and gained further support from an improving global economic outlook. The IMF revised its global growth estimate to 3.7% for 2014 from 3.6% in its October estimate. Prices may now look to target tentative resistance around $14,840-$15,000 which has proven difficult to breach in recent months.  

 Japan's All Industry Activity Index pushes into positive territory once more

JNTIAIAM Index Japan All Indust 2014 01 22 08 03 20

The Shanghai Compsite rallies higher on easing money market concerns

SHCOMP Index Shanghai Stock Exc 2014 01 22 08 04 16

3-month LME nickel prices push higher on Indonesian export ban and IMF outlook

LMNIDS03 Comdty LME NICKEL 3 2014 01 22 08 03 39


Events for today: Wednesday, 22 January 2014

1330

US

Jan

NY Fed Manufacturing

1330

US

Dec

PPI Core

1530

US

w/e

EIA Energy Stocks

View Economic Market Calendar

 

Topics: Equities, TOPIX, LME, Nickel
More from: Kash Kamal