Sinopec Scandal Drags On Chinese Equities, EU Markets Play Catch-Up, No Follow-Through For US Market

Futures are pointing to a negative open for the major indices on Thursday. Traders should expect more volatility in today’s trading with a possible retest of support levels confirmed in Wednesday trading.
Thomas Hughes

Markets in Asia were firmly mixed following the massive rally in US stocks Wednesday. The rally, driven by oversold conditions and fueled by weak Holiday trading volume, recovered all the losses posted by US equities over the previous two trading days but the gains were not projected into all trading markets.

Asia Mixed In Wake Of Dow Industrials Record Breaking Rally

The Japanese Nikkei posted the largest advance on Thursday, up nearly 3.90%, but other indices in the region were not so lucky. The Nikkei was lifted by news Apple’s iPhone Xr had taken 32% of Apple’s iPhone sales just 30 day’s after its release. Shares of Japan Display, maker of iPhone Xr screens, surged nearly 6% on the news.

The Korean Kospi also advanced on strength in tech, gaining near 1.90% on Thursday, while the Australian ASX closed with a microscopic 0.02% increase. The Chinese-focused indices, the Shang Hai Composite, Shenzen, and Hong Kong Heng Seng all posted losses on word top-officials in China’s state-run energy company China Petroleum and Chemical, also known as Sinopec, had been suspended. The officials, in charge of the companies trading arm, have been accused of misconduct related to company losses.

EU Markets Fall Despite The Massive US Rally

Equity in the EU fell across the board in Thursday trading. These bourses, closed since last week, are playing catch-up with the US market which posted huge losses on the last two trading days before Christmas. The German Dax was leading at midday with a loss near -2.0% while others in the region were showing smaller losses (-1.25% FTSE and -0.40% for the CAC). The DAX is now in bear-market territory, down about -22.0% from its peak set earlier this year.

The retail sector was one of few to show gains in Thursday trading, buoyed by a report from Mastercard. Mastercard says holiday sales topped 5.0% growth from last year, accelerated at their fasted pace on record, and hit a decade high. EU retailers were up about 1.25% on the news.

No Follow-Through For US Indices

US traders breathed a sigh of relief on Wednesday when the major indices staged a record-breaking rebound. The Dow Jones Industrial Average surged more than 1,000 points, its largest point gain in history, but the positive sentiment did not carry over into Thursday trading.

Futures are pointing to a negative open for the major indices on Thursday. The Dow Jones INdustrial’s is indicated to give up nearly half of its Wednesday’ gains on word the White House is about to issue an executive order barring US business from purchasing products from Huawei and ZTE. This news, not unexpected, is in sharp contrast to hopes US/Sino trade relations were thawing, and word from China that US and Chinese officials were set to meet in January. Traders should expect more volatility in today’s trading with a possible retest of support levels confirmed in Wednesday trading.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US