Markets rallied cheerfully last night, responding positively towards Fed’s decision to hold fire in September. Nasdaq advanced 0.84% and hit a record new high at 5,339.52 points. The average price to earnings ratio of the benchmark now stands at over 41 times, the highest valuation in six years, as investors are optimistic towards the upcoming earnings season.
The rest of US and European markets closed higher too, with Euro Stoxx 50, CAC 40 and DAX rallying over 2%. The positive sentiment
US dollar index slides for a second day to 95.34 this morning. It seems to have found some support at 95.00 area as the index rebounded last night after hitting this level. USD/JPY rebounded to 101.10 area, with the immediate resistance level at 101.62 and immediate support level at psychological support level of 100.00.
Crude oil prices advanced for a third day as market continue to digest the drop in US commercial inventory data and optimistic remains on possibility of any freezing plan in the informal OPEC talk next week.
Crude Oil West Texas Nov 2016
Hang Seng Index leads Asia’s gain
In Asia, the Hang Seng Index has outperformed most of its regional peers by recording gains in an excess of 20% in the post-Brexit Rally. Despite the recent economic data showing signs of stabilization in the Chinese economy, a confirmation of a “bottom out” has yet to be seen. The immediate support and resistance levels for the Hang Seng Index are 23,200 and 24,600 respectively.
Singapore’s Straits Times Index remained range-bound for a seventh running month. The country’s oil and gas companies are facing increasing challenges against a commodities slump and decline in oil prices. Some companies were not able to fulfill debt obligations and defaulted on coupon payments which led to adverse losses for bond investors. All this has deepened concerns surrounding the exposure of Singapore banks to the oil and gas sector.
However, the downside of Singapore stocks is cushioned by cheap valuation and consistent dividend payouts. Its benchmark index gives an average dividend yield of 3.8%, which is attractive in today’s low interest rate environment.
Hong Kong 50 - Cash
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Margaret Yang Yan