European Open: Remember Evergrande? It Just Rallied 33%

That’s no typo either. At time of writing the Chinese Property Developer, which struck markets with fears of contagion this week, is on track for its best day ever.

Charts (1)



Asian Indices:

  • Australia's ASX 200 index rose by 76.9 points (1.05%) and currently trades at 7,373.80
  • Japan's Nikkei 225 index has fallen by -1533.07 points (-0.51%) and currently trades at 29,686.68
  • Hong Kong's Hang Seng index has risen by 219.48 points (0.91%) and currently trades at 24,441.02

UK and Europe:

  • UK's FTSE 100 futures are currently up 26.5 points (0.38%), the cash market is currently estimated to open at 7,109.87
  • Euro STOXX 50 futures are currently up 23 points (0.56%), the cash market is currently estimated to open at 4,173.19
  • Germany's DAX futures are currently up 69 points (0.45%), the cash market is currently estimated to open at 15,575.74

US Futures:

  • DJI futures are currently up 338.48 points (1%)
  • S&P 500 futures are currently up 34 points (0.22%)
  • Nasdaq 100 futures are currently up 12.25 points (0.28%)


Learn how to trade indices


Evergrande, never bland!

The Hong Kong stock exchange reopened after yesterday’s public holiday to see Evergrande (3333) gap higher by round 10% and rally almost 33% by today’s high. Still, the move needs to be taken in context of where it came from. It has fallen around -93% from its 2020 high of 27.95 down to a low of 2.06 last week, and it is arguably easier to add a third from such low numbers after such a low fall (it wasn’t far off being a penny stock). And whilst Jerome Powell soothed contagion fears at yesterday’s press conference, Beijing injected liquidity to support markets and Evergrande did vow to pay (some) of its debt today, this saga is still far from over. Assuming they miss today’s additional US $88 million debt payment, it simply buys them another 30 days and they have other debts to service as well.

Elsewhere, the returns may not have been so extreme overall but stocks followed Wall Street higher. The ASX 200 rose around 1% with the Hang Seng and Nikkei futures up around 0.8%.


FTSE 350: Market Internals


FTSE 350: 4096.23 (1.47%) 22 September 2021

  • 249 (70.94%) stocks advanced and 86 (24.50%) declined
  • 18 stocks rose to a new 52-week high, 7 fell to new lows
  • 71.79% of stocks closed above their 200-day average
  • 56.41% of stocks closed above their 50-day average
  • 15.1% of stocks closed above their 20-day average

Outperformers:

  • + 10.56%   -  Oxford BioMedica PLC  (OXB.L) 
  • + 6.89%   -  Antofagasta PLC  (ANTO.L) 
  • + 6.76%   -  John Wood Group PLC  (WG.L) 

Underperformers:

  • -6.75%   -  Jtc PLC  (JTC.L) 
  • -4.56%   -  PZ Cussons PLC  (PZC.L) 
  • -3.87%   -  Bridgepoint Group PLC  (BPTB.L) 


Forex: Flash PMI’s, SNB and BOE meetings up next

GBP picked up overnight with risk assets on Fed, China and Evergrande optimism. Today’s main events are a host of flash Markit PMI’s across Europe and US which begins with France at 07:45, Germany at 08:30 and Europe at 09:00. Oh, and we have the SNB policy rate at 08:30 but there are no expectations of a policy change today.

UK PMI data is then scheduled for 09:30 ahead of this month’s BOE (The Bank of England) at 12:00. Whilst there were hopes for a hawkish meeting, exponentially rising energy costs of recent weeks is likely to see the BOE hold back today as the likelihood of weak growth in GDP appears strong. Still, with several GBP pairs sitting at key support levels it may take a dovish meeting to see further selling pressure. We therefore have a neutral view on GBP today.

USD/CHF is of interest for potential bullish setups. In the US session we then have jobless claims, retail sales and flash PMI data to look forward to.


Learn how to trade forex


Copper to extend its rally form yesterday?


Copper futures have remained above $4.00 despite Evergrande woes fanning growth fears (and dwindling demand for copper). Now that fear has taken a back seat it leaves potential for copper to continue higher over the near-term. A 3-bar bullish reversal formed yesterday (Morning Star) which respected the 200-day eMA, monthly S1, weekly S2 pivot points and held above $4.00. It trades just below the centre point of the 4.00 – 4.435 range but prices have held near yesterday’s highs, so we’re hoping support can be build above (or around) 4.18 before continuing higher today.


View today’s video: WTI Bulls Build Their Case, Fed Gives USD a Tailwind


Up Next (Times in BST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


More from Commodities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.