Capio Capital Market Overview and Trade Ideas In the US market, hopes of a fiscal deal resulted in stocks closing in positive territory with only 3 days remaining. The Dow reversed a 101 point drop to close up 64 points with 22 of its 30 components gaining ground. Healthcare & energy counters outperformed on the S&P but volumes remained below average. Netflix stood out after reports the company was in talks to get its services on set top boxes while Whirlpool was sold off after reduced demand for its products. Look out for numbers from Citigroup, Johnson & Johnson, Coca Cola & Intel Group today. European stocks traded off their lows but lacked direction as talks in the US remained deadlocked and after weak economic data from China. Dassault Systemes SA missed forecasts to weigh on the CAC with Peugeot sliding after the carmaker confirmed it was in talks with partners that would result in financial consequences. Electricite de France climbed after the company moved closer to securing a deal worth 14 billion Pounds. The company will build and operate nuclear reactors in the UK. Heavyweight oil firms climbed to support UK’s FTSE despite a lower oil price while banks were among the decliners. Also making the news, Vodafone has completed its takeover of Kabel Deutschland. Asian stocks followed gains on Wall Street after lawmakers appeared to move closer towards raising the US debt limit. Investors in Tokyo & Hong Kong returned from a 3 day weekend. Overnight gains in the gold and copper price saw miners in Australia move higher (BHP +1%, Rio +2.1%) with the country’s central bank minutes suggesting a continued accommodative stance. Financial stocks gained after data out showed robust credit growth with a weaker yen benefitting exporters in the region. Hankook (+1.9%) rose after South Korea’s largest tyre producer will look to build its 1st factory in the US. The local bourse (+0.3%) caught many investors offside after closing in positive territory with a strong resource & financial sector overshadowing losses in the industrial space. Strength in the gold price saw ANG (+3.5%) outperform followed closely by AGL & GFI. A weak oil price weighing on Sasol. Construction counters took a breather after running hard of late (AEG -3.5%, MUR -2.1%) with mobile telco’s remaining under pressure. Retailers also amongst the decliners. Financials put in a strong performance with banks ending the day strongly led by FSR (+1.6%). Property counters however ended lower as bond yields moved higher. This morning the rand is trading at USDZAR9.8929, EURZAR13.4283 and GBPZAR15.8245 as of 07h00. The rand was on the back foot in Monday afternoon trade due to the situation caused by the US debt-ceiling conflict. Trade Ideas 1) Long: SHP off R169, stock has technical support at the R165 level. If we look at recent data upside potential is R21, while downside risk R4. Stoploss at R164. 2) Long: EXX close to R160, stock has got technical support at the R160 level, we expecting a bounce from here. Short term target price R170, stoploss at R155.
Posted on: Tue, 15 Oct 2013 07:09:42 +0000
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