Stock Exchange Ends Positive Movement
Hang Seng index in Hong Kong Stock Exchange closed up 422 points, or 1.99 percent, at 21 696 pushed the index .. Strengthening investor caution ahead of US rate hike decision next morning and strengthening oil stocks
The US Federal Reserve’s decision will be announced in a statement at 3 am on Thursday morning, while Hong Kong, and the rise in US interest rates will see the first tightening cycle takes place in nearly a decade.
Shares of oil producers gained. CNOOC shares closed 3.4 percent higher at HK $ 8.17, while shares of oil producer and refinery of China Petroleum & Chemical (Sinopec) jumped 7.3 percent to HK $ 4.69 and rival PetroChina shares rose 4.95 percent to HK $ 5.3.
Meanwhile other news, shares of Alibaba Pictures Group jumped 5.56 percent to HK $ 1.90 after the company announced it has executed an agreement of partnership with Fosun International and Sequoia Capital US investment group to acquire film distribution company China Bona Film Group for US $ 86 million.
Fosun International shares rose 1.54 percent to HK $ 11.84 despite the stock is still down about 10 percent in the three trading sessions since the reappearance of the company’s chairman Guo Guangchang.
Meanwhile movement observed Hang Seng index futures gained 64 points or 0.29% at 21,802.00, down from the previous closing at 21,738.00.
Technically, the index on the trading session today, Thursday (17/12) likely to strengthen, test positive trend. At the M15 chart bullish hammer formation to provide opportunities for the index to move upside. However, the volume tends to increase, as well as an early indication of bullish index. In addition, RSI, the M15 chart, was oversold, signaling upside.
It is estimated, the index test the first resistance level that is 21 880 and 21950. If it fails at 21810, then the next index is expected to tend to retest the support level of 21750 and continued up to the possibility of being in the 21700 area.
Pounds Mired On Slow Growth Impact
Pound sterling fell to an 8-day low point against the dollar yesterday after data showed UK wage rate grew at the slowest pace since the beginning of the quarter to October, despite relatively solid job creation and lower unemployment.
Regular wage rate of the British workers, out bonuses only grew 2.0% on quarter in October, too late since February quarter, thus reducing the potential for BoE rate hike in the near future. UK unemployment rate fell unexpectedly to the lowest level in seven years at the level of 5.2 percent. Sterling even declined after the data, to its lowest level since December 8.
In an interview in front of the Financial Times, BoE Governor Mark Carney stated that the conditions in which low interest rates persist for long periods, can lead to fragility in certain sectors. This means that macro-prudential policy is more strict and active monetary policy needs to be implemented so that retrieved more efficiently. Besides Carney also emphasized the BoE inflation target at 2 percent must be achieved.
Technically, the trading session today, Thursday (17/12), pound sterling-dollar pair has an opportunity to move in a negative trend.
The weakening of the pound sterling mainly expected soon reexamine the minimum support at 1.4900 and maximum 1.4840. Meanwhile, if the pound sterling was able to break and hold above 1.4950, then the other alternative scenario that is Pound chance to test resistance in 1.4990 and 1.5050 area.
Gold Price Experiencing Stability After Rate Increase To US
Gold held steady after the Federal Reserve raised US interest rates for the first time in nearly a decade, as expected, so obviously it was early tentative “gradual” tightening cycle.
The Committee set the policy-range US central bank raised its benchmark rate by a quarter percentage point to between 0.25 and 0.50 percent, ending a long debate about whether the economy is strong enough to withstand higher borrowing costs.
“Gold has remained stable as dovish statement and bottom dot plot that has leavened the impact of the first rate hike in nine years,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
“Muted reaction shows that a weak closed earlier today when gold traded above $ 1,078.”
Spot gold last traded down less than 1 percent, or 75 cents, at $ 1,071.81 per ounce, below a session high of $ 1,078.20. Before the Fed statement, US gold futures for February delivery closed up 1.4 percent at $ 1,076.80 an ounce.
The gold price has fallen nearly 10 percent this year, largely on the back of speculation that US interest rates will be increased from a record low, raising the opportunity cost of holding non-yielding bullion while boosting the dollar.
They have recovered from near six-month lows this year, however, as attention turned from the first time that the rate hike could potentially slow increase in the future.
In a poll of more than 90 economists taken between December 4 and 9, the probability that the Fed will raise rates rose to 90 percent.
Global equity markets rallied in volatile trading while the dollar and US Treasury yields rose after the Fed’s statement.
Investors scaled back positions in gold ahead of the Fed meeting. Holdings of exchange-traded gold-backed funds in the world, New York-listed SPDR Gold Trust, at their lowest level since September 2008.
US government data showed investors have increased their bearish bets on gold to record levels this month, although they have since edged back from the summit.
“The gold market without any funds that come from the exchange-traded fund backed gold and jewelery demand remains fairly soft,” said INTL FCStone analyst Edward Meir.
Silver up 3 percent at $ 14.16 an ounce, after falling to its lowest level in more than six years this week at $ 13.60.
Platinum rose 1.7 percent to $ 869.75 an ounce and palladium rose 0.5 percent to $ 567.50 per ounce.
Technically, gold in today’s trading session on Thursday (17/12) potentially bearish, tested negative trend back, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band begins to widen, thus giving impetus for gold to the upside.
It is estimated that the gold price immediately prior to test support in the area of at least 1065.33 and re-test the maximum level of 1060.73. However, if the price of gold is able to break and hold above 1070.10, the predicted gold prices could potentially test Resistance ie, 1073.40 and 1078.72.
