China Market Retreats: Analysis For Hang Seng, Nikkei 225, ASX, NASDAQ

Hang Seng

Hang Seng retreats as Chinese banks cut lending rates to provide support to its economy. The one-year Loan Prime Rate declined from 3.35% to 3.10%, compared to analyst consensus of 3.15%. The five-year Loan Prime Rate decreased from 3.85% to 3.6%, compared to analyst forecast of 3.65%. The Loan Prime Rate is set by a group of big Chinese banks and has a major impact on the country’s economy. Traders are worried that Chinese economy will continue to slow down despite efforts to boost demand, which is bearish for Hang Seng.

In case Hang Seng settles below the 20,500 level, it will head towards the nearest support level, which is located in the 19,700 – 19,800 range.

Nikkei 225

Nikkei 225 was flat as traders waited for stronger catalysts. There were no significant economic reports scheduled to be released in Japan today, so traders focused on general market sentiment.

The technical picture remains unchanged as Nikkei 225 is stuck between the support at 37,800 – 38,000 and the resistance at 39,400 – 39,500.

ASX

ASX received support in the 8260 – 8285 range and gained additional upside momentum. The rebound in the mining sector, which was driven by the strong performance of commodity markets, provided material support to ASX.

In case ASX settles above the 8350 level, it will head towards the 8400 level. On the support side, a move below the support at 8260 – 8285 will open the way to the test of the next support level at 8090 – 8110.

NASDAQ

NASDAQ pulled back as traders took some profits off the table after the recent rebound. Demand for tech stocks stays strong, but NASDAQ may need additional positive catalysts to get to the test of the nearest resistance level at 20,700 – 20,800.

On the support side, a successful test of the support at 20,000 – 20,100 will push NASDAQ towards the next support level at 19,500 – 19,600.

For a look at all of today’s economic events, check out our economic calendar.