Nasdaq 100, FAANG, ASX 200, Nikkei 225 – Asia Pacific Indices Briefing

  • Nasdaq 100 surges after Facebook, Amazon, Apple, Google earnings
  • ASX 200 and Nikkei 225 may follow Wall Street stocks higher ahead
  • All eyes turn to Chinese manufacturing PMI data during APAC trade

Nasdaq futures soared as much as one percent after Thursday’s Wall Street close following US tech giants Facebook, Apple, Amazon and Google smashing earnings expectations. These companies are also part of the FAANG group which includes Netflix. Their shares rose in afterhours trade, defending relatively elevated valuations compared to other sectors of the stock market like financial, real estate and industrial shares.

Broadly speaking, equities spent most of their time during the North American session rallying after weakness from Asia Pacific and European market hours. This was enough to edge out a 0.43% gain in the tech-heavy Nasdaq by the close as the S&P 500 and Dow Jones still finished -0.38% and -0.85% lower respectively. A historical contraction in US GDP may have kept most stocks trading in the red.

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Nasdaq 100 Technical Analysis

Nasdaq 100 futures are on the cusp of pressuring key resistance which is a range between 10964 and 11058. This follows a bounce off rising support from April – red channel on the daily chart below. With that in mind, the index is not quite yet in the clear to extend gains with prices still little changed over the past two weeks. If resistance holds here, there may be a descent towards the trendline due ahead.

Nasdaq Futures – Daily Chart

Nasdaq 100 Soars on FAANG Earnings, ASX 200 and Nikkei 225 May Follow

Chart Created in TradingView

Friday’s Asia Pacific Trading Session – Chinese Manufacturing PMI

With that in mind, Asia Pacific stock markets may follow the Wall Street session higher as investors rejoice the collective earnings beat from prominent tech players. That may push Australia’s and Japan’s benchmark stock index, the ASX 200 and Nikkei 225, higher respectively.

All eyes turn to Chinese manufacturing and services data next. Unlike US GDP data, these will offer more timely information into the health of the world’s second-largest economy. Data from China continues its tendency to outperform relative to economists’ expectations.

That may open the door for an upside surprise as economists forecast a 50.8 print in manufacturing data. PMI readings above 50 indicate expansion in activity and vice versa. With China being Australia’s largest trading partner, a rosy print could inspire a knock-on rally in local shares.

ASX 200 Technical Analysis

From a technical standpoint, the ASX 200 could be at risk to turning lower after prices fell under rising support from late March – red line on the daily chart below. Yet follow-through at this moment has been lacking, undermining the breakout thus far. Resuming the uptrend entails taking out resistance which is a zone between 6156 and 6198. Below, the 50-day Simple Moving Average could contain losses.

ASX 200 – Daily Chart

Nasdaq 100 Soars on FAANG Earnings, ASX 200 and Nikkei 225 May Follow

Chart Created in TradingView

Nikkei 225 Technical Analysis

The Nikkei 225 could be at risk to losses after prices broke under a Symmetrical Triangle chart pattern. This is a neutral formation whereby the direction of the breakout may signal the road ahead. In this case, it could be to the downside which leaves key support as the 50-day SMA and then at 21969. Invalidating the triangle could see prices push higher towards resistance which is a key range between 22965 and 23178.

Nikkei 225 – Daily Chart

Nasdaq 100 Soars on FAANG Earnings, ASX 200 and Nikkei 225 May Follow

Chart Created in TradingView

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter





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