Asian Stock Market Analysis (November 28, 2023)

Create at 3 months ago (Nov 28, 2023 11:05)

Asian Stocks Fall on China Concerns; Economic Data Awaited

Most Asian stocks experienced declines on Monday, influenced by weak signals from China and heightened anticipation of crucial economic data releases throughout the week. Chinese stocks, particularly the Shanghai Shenzhen CSI 300 and SSEC indexes, were the day's worst performers, dropping 1.1% and 0.7%, respectively. This decline followed data indicating a sustained fall in China's industrial profits, reflecting ongoing challenges in the country's major economic sectors. Investors were also growing impatient for additional stimulus measures from Beijing.

China's central bank released its quarterly policy implementation report, emphasizing its commitment to warding off systemic risks and using forceful and targeted monetary policies to support domestic demand. Despite signs of China's economy gaining momentum, challenges such as an imbalanced global economic recovery and an unstable foundation for domestic economic recovery were acknowledged.

Profits at China's industrial firms extended gains for a third consecutive month in October, albeit at a slower pace, indicating a need for additional policy support from Beijing. China has implemented various policy measures throughout the year to bolster its post-pandemic recovery, addressing issues such as a property sector downturn, local government debt risks, slow global growth, and geopolitical tensions.

Japan's Nikkei 225 fell by 0.5%, retracing from the 33-year highs reached the previous week. Weak PMI data raised concerns about slowing business activity in Japan, exacerbated by sluggish demand in its major export markets. Despite these challenges, the prospect of a dovish stance from the Bank of Japan continued to support Japanese stocks, with the Nikkei on track for an over 8% rise in November.

Japan experienced a slight pickup in core consumer price growth in October, reinforcing the view that persistent inflation might prompt the Bank of Japan to reconsider its monetary stimulus.

Japan's industrial output likely inched up in October, although disruptions at top automaker Toyota were expected to weigh on the data. The output of electronic products remains strong. However, a November business survey reveals the sixth consecutive month of factory activity contraction, emphasizing economic fragility amid soft demand and inflation. The economy faced challenges from slowing growth in major export destinations, particularly China. The Japanese government downgraded its economic view for November, citing weak demand impacting capital spending and consumer expenditure. This followed data showing the economy shrank in July-September for the first time in three quarters.

India's economic expansion likely moderated in the September quarter but remained robust, supported by strong service activity and urban demand. The country's GDP growth was expected to slow to 6.8% from 7.8% in the previous quarter, reflecting a minor slowdown in the face of a global economic downturn. Consumer demand, a significant contributor to GDP growth, remained strong despite an erratic monsoon.

The upcoming focus for the week shifted to key purchasing managers index (PMI) readings from China for November, scheduled for Thursday. These readings were expected to provide insights into business activity, following a surprisingly weak set of PMIs in October. Concerns over China's economic performance had a broader impact on Asian indexes, given its role as a dominant trading destination in the region.

Concerns over slowing global economic growth, reflected in weak PMI readings from Japan, the euro zone, and the U.S., dampened earlier optimism in Asian markets, potentially leading to further weakness if investors decide to secure recent profits.

Data for Technical Analysis (1H) CFD JP225 Nikkei 225 Futures - Dec 23

Resistance : 33399.2, 33421.2, 33456.7

Support : 33328.2, 33306.2, 33270.7        

1H Outlook                                    

Asian Stock Market AnalysisSource:  

Buy/Long 1 If the support at the price range 33286.2 - 33328.2 is touched, but the support at 33328.2 cannot be broken, the TP may be set around 33399.2 and the SL around 33265.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 33399.2 - 33441.2, TP may be set around 33480.0 and SL around 33307.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 33399.2 - 33441.2 is touched, but the resistance 33399.2 cannot be broken, the TP may be set around 33304.4 and the SL around 33462.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 33286.2 - 33328.2, TP may be set around 33215.0 and SL around 33420.0, or up to the risk appetite.       

Pivot Points Nov 28, 2023 02:54AM GMT

Pivot Points
Classic 33211.4 33270.7 33304.4 33363.7 33397.4 33456.7 33490.4
Fibonacci 33270.7 33306.2 33328.2 33363.7 33399.2 33421.2 33456.7
Camarilla 33312.4 33320.9 33329.5 33363.7 33346.5 33355.1 33363.6
Woodie's 33198.4 33264.2 33291.4 33357.2 33384.4 33450.2 33477.4
DeMark's - - 33334 33378.5 33427 - -

Sources: Investing 1Investing 2

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