S&P 500, Hang Seng Index, ASX 200 OUTLOOK INDEX:

• Dow Jones, S&P 500 and Nasdaq 100 close +0.11%, +0.28%, and +0.38% respectively
• US inflation hit a four-decade high of 7.0% in December, broadly in line with expectations
• Asia-Pacific markets are expected to open higher. Hong Kong stocks may continue to lead the gains

Nasdaq 100, Hang Seng Tech, Inflation in the United States, Inflation in China, Asia-Pacific at the Open:

Wall Street shares closed slightly higher on Wednesday, as Inflation data for the United States did not deliver much surprise. The day before, the chairman of the Federal Reserve Jerome Powell Market participants assured that the central bank would tighten policy to contain inflation without hurting the economy. This clear focus removed political uncertainties and allowed investors to focus more on the next earnings season.

the US dollar DXY the index fell 0.62% overnight, falling to a two-month low of 95.00. This can be attributed to the unwinding of business, with investors already anticipating at least three rate hikes this year. As the tightening roadmap becomes clearer, some traders may seek an exit and profit-taking opportunities. A weak US dollar is generally positive for stocks, commodities and emerging market assets.

Top 10 stocks by market cap in the Nasdaq 100

Source: Bloomberg, DailyFX

Hong Kong stocks could continue to rise on Thursday, led by the tech sector. that of Hong Kong Hang Seng Index jumped 2.8% and the technological benchmark Hang Seng Technology Index climbed nearly 4.99% on Wednesday, suggesting investors may buy the dips in anticipation of monetary support and further stimulus. Saved stock connections 5.29 billion Hong Kong dollars net entries to the south on Wednesday, marking the highest level since October 2021. The wealth effect could encourage more buyers to return to the market after months of selling.

Another catalyst on Wednesday was the release of weaker-than-expected information inflation figures. The December CPI and PPI stood at 1.5% and 10.3% respectively, down from November’s readings of 2.3% and 12.9%. This will make it easier for PBOC to ease monetary policy in 2022 to stimulate growth as the country fought to maintain its zero-Covid policy.

the Japanese the government extended the strict border controls until the end of February in a context of rapid increase in Covid-19 cases due to the Omicron variant. This weighed on market sentiment, particularly in the tourism and travel sectors. the Nikkei Index 225 remains in a mood of consolidation while waiting for new catalysts for a breakout.

China Inflation – December 2021

Source: Bloomberg, DailyFX

Looking ahead, several official Federal Reserve speeches dominate the economic record alongside we initial weekly jobless claims. Learn more about theDailyFX Economic Calendar.

Asia-Pacific Markets is expected to open significantly higher on Thursday. Futures in mainland China, Australia, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, India and Thailand are in the green, while those in Japan are in the red.

Thinking back to Wednesday’s close, 10 of the S&P 500’s 11 sectors ended higher, with 57.6% of index constituents closing in the green. Materials (+0.95%), consumer discretionary (+ 0.63%) and information technology (+ 0.44%) are among the best performers, while healthcare (-0.26% ) and finance (+ 0.04%) are lagging behind.

Sector performance S&P 500 12/01/2022

Source: Bloomberg, DailyFX

Nasdaq 100 Technical Analysis Index

The Nasdaq 100 Index rebounded from a key support level of 15,550 – the lower end of the range area it has traded in recent months. An immediate resistance level can be found at 16,650 – the 200% Fibonacci extension. The moving average lines flatten out, indicating a lack of clear direction. The MACD indicator is trending downward, suggesting that bearish momentum may prevail.

Nasdaq 100Index – Daily chart

Graphic created with TradingView

Technical analysis of the Hang Seng index:

The Hang Seng Index (HSI) was trading in one “Fall Wedge” model of the last months, as highlighted in the table below. The prices are challenge the upper trendline of the corner for a breakout. A successful attempt can signal an uptrend reversal and open the door to further gains.The MACD indicator follows an uptrend below the neutral midpoint, suggesting that bullish momentum may be building.

Hang Seng Index – Daily chart

Graphic created with TradingView

Technical analysis of the ASX 200 index:

The ASX 200 index has returned to a limited area between 7,200 and 7,500 after a “false break” last week. The bottom and top of the range can be seen as immediate support and resistance levels, respectively. A significant breach above 7,500 may intensify buying pressure and expose the next resistance level of 7,760.

ASX 200 Index – Daily chart

Graphic created with TradingView

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter