Capio Capital Market Overview and Trade Ideas Asian markets are trading higher this morning after a preliminary purchasing manager’s index for China beat expectations. The PMI came in at 50.8 exceeding the 49.7 estimate. The Nikkei was up 0.36% at the time of writing. Olympus Corp. gained 5%. A report showed that Japanese businesses in the Topix index have been buying their own stock at the fastest pace ever in an attempt to catch up on the global equity rally this year.The Hang Seng was up 0.43% with Tencent up over a percent and in Australia the ASX was up 0.73% wiith BHP Billiton gaining just under 1.5%. US markets closed higher with the DOW gaining 0.15% at 16,947.08 and the S&P gaining 0.17% at 1962,87. Investor confidence was strengthened this week as the US economy showed more signs that is was recovering and the Fed vowed to keep interest rates low and Janet Yellen said that accommodative monetary policy should lead to above trend growth. Among individual stocks Caterpillar, Johnson & Johnson and Exxon mobile all gained over a percent while IT giant Oracle fell close to 4% after reporting weaker than expected fourth quarter results. European stocks managed to recover from losses at the end of Fridays session after trading lower for most of the day closing little changed from the previous trading session. The FTSE gained 0.25% with specialist pharmaceutical company Shire Plc gaining 16% after it rejected a bid of $46bn from pharmaceutical firm AbbVie Inc. TSB banking group gained 12% after Lloyds sold a bigger than planned stake in the IPO. The DAX fell 0.17% as financial stocks traded lower on the day. Commerzbank and Deutsche bank lost 3% and 2.8% respectively. The CAC lost just under half a percent as financial, I.T. and telecoms traded lower. Orange led the declines falling over 3%. The JSE closed flat on Friday with the All Share gaining just over a tenth of a percent. The trading day was relatively quiet and the index rebalancing providing the only notable action on the day. Vodacom lead gains rising over 3% while Anglo Gold gained over 2% despite the gold spot price giving up some of its gains from the previous day. Resource stocks were flat as the rand ended the week firmer. Financial stocks were mixed with Nedbank and FirstRand leading the gains while Sanlam lost just over a percent. All eyes will be on the platinum sector this week as a wage deal seems to be imminent. Value traded was R19.2bn and the rand was at R10.65 to the dollar. Trading Ideas 1) Long SHP from R155. Stock is totally oversold. Technically and fundamentally the stock looks bullish. Looking to retest levels at R165. 2) Long IMP from R112.50 , we are expecting a resolution on the strike soon, which we expect will have a positive impact on the stock.
Posted on: Mon, 23 Jun 2014 07:23:38 +0000
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