DOW JONES, HANG SENG INDEX, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.74%, +1.13% and +1.94% respectively
• The Fed signalled a 50bps charge hikes on the subsequent FOMC assembly, assuaging considerations about surging inflation
• Alibaba elevated share buyback plan to $25 billion, the most important amongst Chinese language tech corporations

Dow Jones, Hold Seng Index, Alibaba, Asia-Pacific at Open:

The Dow Jones Industrial Common climbed 0.74% and the tech-heavy Nasdaq 100 surged 1.94% on Tuesday. Wall Road shares rose for 5 out of the final six buying and selling classes as buyers shrugged off the Ukraine disaster and centered on tightening financial coverage amid inflation considerations. Fed Chair Jerome Powell signaled {that a} 50bps charge hike is feasible on the subsequent FOMC assembly as inflation hits a 40-year excessive and appears set to edge even greater on account of rising commodity costs. He additionally believed that the US financial system is powerful sufficient to resist greater borrowing prices.

Individually, the 10-year Treasury yield climbed 9bps to 2.38%, reflecting a steady selloff within the bond market. It means that capital could also be flowing from secure havens into equities as merchants search yield and development. Nonetheless, rising Treasury yields could restrict the upside potential for equities as the chance price of holding them turns into greater.

Hong Kong’s Hold Seng Index climbed 3.15% and the Hold Seng Tech Index soared 5.37% on Tuesday after Alibaba raised its share buyback program to $25 billion from $15 billion. This marks the most important repurchase program ever amongst Chinese language tech shares. The quantity is equal to about 9% of Alibaba’s market cap, thus considerably boosting investor confidence.

Alibaba’s share worth soared 11% after the announcement, displaying that the market welcomed the choice. Share buybacks normally occur when the corporate’s administration believes that its inventory worth has fallen beneath the intrinsic worth, and serves to shore up costs and revitalize investor confidence. Alibaba’s Deputy Chief Monetary Officer Toby Xu stated “the upsized share buyback underscores our confidence in Alibaba’s long-term, sustainable development potential and worth creation”.

Final week, Chinese language Vice Premier Liu He stated extra favorable insurance policies can be rolled out to spice up financial development in addition to to stabilize the capital market. Hong Kong and mainland shares soared after the announcement, with Hold Seng Index and the CSI 300 Index gaining 18.8% and 6.8% respectively up to now. The Hold Seng Tech Index, which has misplaced 68% of its worth over the previous 12 months, has rebounded 34% since final Wednesday. The coverage “U-turn” and Alibaba’s share buyback plan recommend that Hong Kong’s expertise sector has in all probability reached a backside and should lengthen its rally within the weeks to return.

Alibaba – Nonetheless a Lengthy Strategy to Go

Chart created with TradingView

Asia-Pacific markets look set to open on the entrance foot following a constructive lead on Wall Road. Futures in Japan, mainland China, Australia, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, India and Indonesia are all within the inexperienced.

Trying forward, the UK core inflation charge dominates the financial docket alongside Fed Chair Jerome Powell’s speech and new properties gross sales figures. Discover out extra from the DailyFX financial calendar.

Trying again to Tuesday’s shut, 7 out of 9 Dow Jones sectors ended greater, with 80% of the index’s constituents closing within the inexperienced. Info expertise (+1.45%), financials (+1.10%) and industrials (+1.0%) had been among the many greatest performers, whereas vitality (-0.33%) and healthcare (-0.28%) trailed behind.

Dow Jones Sector Efficiency 22-03-2022

Supply: Bloomberg, DailyFX

Dow Jones Technical Evaluation

The Dow Jones Industrial Common fashioned an “AB=CD” sample, which is perceived as a bullish trend-reversal indicator. Costs are difficult 34,720 (38.2% Fibonacci extension) for instant resistance, breaching which can expose the following resistance degree of 35,140. The MACD indicator fashioned a bullish crossover and trended greater, underpinning upward momentum.

Dow JonesIndex – Day by day Chart

Chart created with TradingView

Hold Seng Index Technical Evaluation:

The Hold Seng Index (HSI) breached above a trendline resistance and thus opened the door for additional upside potential with an eye fixed on 22,450 – the 61.8% Fibonacci retracement. A right away assist degree will be discovered at 21,640. Holding above this degree could pave the way in which for extra beneficial properties. The MACD indicator fashioned a bullish crossover and trended greater, suggesting that purchasing strain could also be constructing.

Hold Seng Index – Day by day Chart

Chart created with TradingView

ASX 200 Index Technical Evaluation:

The ASX 200 index is breached above a key resistance degree of seven,290 and thus opened the door for additional upside potential. The subsequent resistance degree will be discovered at round 7,435 – the 78.6% Fibonacci retracement. The MACD indicator pierced by the impartial midpoint and trended greater, suggesting that bullish momentum is dominating.

ASX 200 Index – Day by day Chart

Chart created with TradingView

— Written by Margaret Yang, Strategist for DailyFX.com

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