Written by Axel Rudolph, Senior Market Analyst at IG
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Nikkei 225 stabilizes as September draws to an end
The Nikkei 225 stabilizes into month-end despite Japan consumer morale falling to a six-month low as better-than-expected preliminary industrial production and a positive close on Wall Street aided Asian stock markets to stem their September falls.
The Nikkei 225 thus managed to stay above its Thursday low at 31,665.4 which was made close to the 25 August low at 31,563.2. Were this level to give way in October, the August low at 31,251.2 would be in focus.
Immediate resistance to contend with is the 22 September low at 32,167.9, followed by the mid-September low and the 55-day simple moving average (SMA) at 32,396.5 to 32,464.9. While below this area, bearish pressure retains the upper hand.
FTSE 100 bounces off support into month end
The FTSE 100 is trying to build on Thursday’s Wall Street led gains following dovish comments by Federal Reserve (Fed) members Goolsbee and Barkin and better-than-expected UK revised business investment numbers.
The 200-day simple moving average (SMA) at 7,650 is thus back in sight. Potential stumbling blocks above it can be seen at the 7,688 June high and also between the 7,723 July peak and the current September high at 7,747. These highs will need to be bettered for the psychological 7,800 mark and the 8 May high at 7,817 to be back in play.
Minor support sits at Wednesday’s low at 7,553.
A fall through this week’s low at 7,523 would open the door to the psychological 7,500 region.
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S&P 500 ends nine straight day fall
A retreat in the oil price, greenback and US yields amid dovish Fed talk and sharply lower revised consumer spending have helped the S&P 500 stem its nine straight day fall to 4,239 and led to a small positive close on Thursday.
While this week’s low underpins, the late June to August lows at 4,328 to 4,337 will be eyed. First, though, Thursday’s high at 4,318 will need to be exceeded.
Below the September low at 4,239 lies the major 4,214 to 4,187 support area which consists of the early and late May highs and the 200-day simple moving average (SMA).