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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 soars as FOMC signals strong economy. Hang Seng Index sees ‘policy bottom’

Hang Seng Index looks set to extend rally after jumping 9% on Wednesday as Chinese policymakers pledged to support market and APAC stocks to open higher.

Source: Bloomberg

Nasdaq 100, FOMC, Hang Seng Index, Asia-Pacific at open.

The Nasdaq 100 index soared 3.7% on Wednesday as Jerome Powell painted a clearer picture about the Fed’s tightening trajectory at the FOMC meeting. The central bank raised the interest rate by 25bps and signalled six more hikes in the forthcoming gatherings to tame inflation, in line with market expectations. It also anticipates to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting, likely in May. Powell also pointed to a 'strong economy' that is able to withstand the Fed’s tightening policy.

Meanwhile, Chinese policymakers made an unusual announcement to support the stock and property market on Wednesday, sparking an astonishing rally in both mainland and Hong Kong shares. The Hang Seng Index jumped the most since 2008 after China's state council pledged to support stock markets. The Hang Seng Tech Index rallied 22%and marked its largest single day gain. Chinese tech ADRs listed on US exchanges extended the rally overnight, led by Alibaba (+36.7%), JD.COM (+39.4%) and Tencent (+33.4%).

The Financial Stability and Development Committee of the State Council held a special meeting to study the current economic situation and capital market issues on Wednesday. The authorities pledged to support overseas stock listings and to keep Chinese capital markets stable. They also promised to implement measures to help handle risks for property developers. Regarding Chinese companies listed in the US, the Chinese and US regulators have maintained good communications and have made positive progress.

Positive signals sent by the state council marks a 'policy bottom' for the Hong Kong stock market after a year-long selloff. The technology sector has lost 68% of its market value over the last 12 months due to Beijing’s anti-monopoly crackdown, US delisting threats and a slowing economy. As the state council made a “U-turn” in its attitude towards the platform companies such as Meituan and Alibaba, investors finally see lights at the end of the tunnel.

Hang Seng Tech Index – daily

Hang Seng Tech Index - Daily Source: TradingView

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

Looking ahead, the Australian jobs report dominates the economic docket alongside the BoE interest rate decision.

Looking back to Wednesday’s close, 9 out of 11 S&P 500 sectors ended higher, with 82.6% of the index’s constituents closing in the green. Consumer discretionary (+3.35%), information technology (+3.32%) and communication services (+2.92%) were among the best performers, whereas energy (-0.43%) and utilities (-0.17%) trailed behind.

S&P 500 sector performance 16 March 2022

S&P 500 sector performance 16 March 2022 Source: DailyFX

Nasdaq 100 technical analysis

The Nasdaq 100 index is attempting to breach the ceiling of a ’Descending Channel’ as highlighted on the chart below. A successful attempt may signal a bullish trend reversal. An immediate support level can be found at 13,110 – the 200% Fibonacci extension. The MACD indicator has formed a bullish crossover, suggesting that buying pressure may be building.

Nasdaq 100 Index – daily chart

Nasdaq 100 Index – daily chart Source: TradingView

Hang Seng Index technical analysis

The Hang Seng Index rebounded sharply, forming a 'bullish engulfing' candlestick pattern. It signals a strong bullish trend reversal and may pave the way for more upside potential. An immediate support level can be found at 17,580, whereas an immediate resistance level can be found at 20,950. The MACD indicator is about to form a bullish crossover beneath the neutral midpoint, suggesting that buying pressure may be building.

Hang Seng Index Source: TradingView

ASX 200 index technical analysis

The ASX 200 index breached above a trendline support as shown on the chart below. Prices are hitting an immediate resistance level at 7,290, breaching which may open the door for further upside potential with an eye on 7,435. The MACD indicator is trending higher, underscoring upward momentum.


ASX 200 Index – daily chart

ASX 200 Index – daily chart Source: TradingView

Follow Margaret Yang on Twitter @margaretyjy

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.

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