Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Nasdaq 100 falls amid nickel short squeeze frenzy, Nikkei 225 may rise

Crude oil extended higher as the US and UK moved forward to ban Russian imports and Asia-Pacific equities look set to open mixed amid surging crude oil prices and lingering geopolitical risks.

Source: Bloomberg

Nasdaq 100, nickel, Ukraine war, crude oil, Asia-Pacific at open

The Nasdaq 100 index finished modestly lower on Wednesday amid another volatile trading session. Investors continued to monitor surging commodity prices and assessed their ramifications for the real economy. The Ukraine war and the follow-on sanctions propelled prices of a wide range of raw materials, including crude oil, European gas, wheat, gold, nickel, aluminum and copper. Many of them have seen prices hitting all-time highs. It is not only the magnitude, but more of the speed of the rally that shocked investors.

The relentless rally in commodities looks set to continue as tensions between Russia and Western powers escalate further. The US is moving forward to ban Russian energy products, and the UK will follow with oil ban as part of the latest sanctions against Russia’s invasion of Ukraine.

The London Metal Exchange (LME) halted trading in nickel contracts after prices more than doubled on Tuesday amid an unprecedented short squeeze. The exchange doesn’t expect to restart trading before March 11. It was reported that China’s leading nickel producer Tsingshan HoldingGroup has a large short position on it. The recent surge in prices may force the company to square off its exposure by buying back from an increasingly illiquid market. The resulting spike in prices is called a ‘short squeeze’, a situation under which short sellers are cornered and have to buy back in extremely unfavourable prices.

Fundamentally, the rally in nickel price was driven by low inventories and concerns about Russian supply disruptions as the Ukraine crisis deepens. Russia is one of the world’s largest producers of nickel, a metal that is used in stainless steel and electric vehicle batteries. The recent Ukraine war and the follow-on economic sanctions stoked market fear about supply shortage in Russian natural resources, pushing prices from oil to natural gas to metals higher.

Extreme volatile commodities sent shockwaves to the financial markets, stoking fears about stagflation – the combination of slow economic growth and high inflation. Some Asian plastic producers have lowered their operation capacity as their profit margins plunged due to rapidly climbing raw material prices. This may be just a snapshot of how rising oil prices can impact downstream industries. With that in mind, stock investors may stand on the sidelines assessing the impact of rising inflation and geopolitical risks on the economic recovery. European stocks have fallen into a bear market, and Asia Pacific markets may follow their route if high inflation starts to dampen consumer spending and squeeze corporate margins.

WTI Crude oil - daily

WTI Crude Oil - Daily Source: TradingView

Asia-Pacific stock markets look set to open mixed on Wednesday. Futures in Japan, Australia, Taiwan, Singapore, India are in the green. Those in mainland China, Hong Kong, South Korea, Malaysia, Thailand and Indonesia are in the red.

Looking ahead, investors will be eyeing China inflation and RBA governor Philip Lowe’s speech.

Looking back to Tuesday’s close, 9 out of 11 S&P 500 sectors ended lower, with 73.9% of the index’s constituents closing in the red. Consumer staples (-2.64%), healthcare (-2.11%) and utilities (-1.63%) were among the worst performers, whereas energy (+1.39%) outperformed.

S&P 500 sector performance as of 08 March 2022

S&P 500 Sector Performance 08 March 2022 Source: DailyFX

Nasdaq 100 technical analysis

The Nasdaq 100 index is trending lower within a 'Descending Channel' as highlighted on the chart below. Prices formed consecutive lower highs and lows over the past few weeks, underscoring a downward trajectory. A successful breach above the ceiling of the channel may signal a bullish trend reversal. An immediate support level can be found at 13,110 – the 200% Fibonacci extension. The MACD indicator is trending lower, suggesting that selling pressure may be dominating.

Nasdaq 100 Index – daily chart

Nasdaq 100 Index – daily chart Source: TradingView

Nikkei 225 technical analysis

The Nikkei 225 index breached below a 'Symmetrical Triangle' pattern and thus opened the door for further downside potential. Prices are testing an immediate support level of 24,725 – the 161.8% Fibonacci extension. The overall trend remains bearish biased as prices formed consecutive lower highs and lower lows. The MACD indicator is trending lower beneath the neutral midpoint, suggesting that near-term momentum remains weak.

Source: TradingView

ASX 200 index technical analysis

The ASX 200 index formed a 'Double Top' chart pattern and has since entered a technical correction. An immediate support level can be found at 6,960 – the 23.6% Fibonacci retracement. Breaching below this level may intensify near-term selling pressure and expose the next support level of 6,758. A key resistance level can be found at 7,290 – the 61.8% Fibonacci retracement and the high of the 'Double Top' chart pattern.

ASX 200 Index – daily chart

ASX 200 Index – daily chart Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products. ​

​The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps
Find out more

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off
Log in now

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform
Log in now

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Take advantage

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.