ASX set to resume, UK stocks continue their run, Asian markets recovery

By Jonathan Jackson. Published at Nov 17, 2020, in Market Wrap

Australian traders were stopped in their tracks yesterday, after the ASX was forced to shut down following an outage of the ASX Trade system yesterday.

It couldn’t have come at a worse time with market firing in morning trading.

The S&P/ASX 200 was up 79 points or 1.2 per cent and the ASX was at a new eight month high, before the shut-down, with the bourse apologising for the closure.

“ASX is very disappointed with today’s outage and sorry for the disruption caused to investors, customers and other market users. The outage falls short of the high standards we set ourselves and the standards others expect of us," said ASX managing director and chief executive Dominic Stevens.

"Notwithstanding the extensive testing and rehearsals, and the involvement of our technology provider, ASX accepts responsibility.

“The obligation to get this right and provide a reliable and resilient trading system for the market rests with us.”

The ASX’s technology provider is the NASDAQ.

The platform is expected to be operating at market open today.

Meanwhile, UK stocks continued their best week since April.

“The reaction of markets last week to Pfizer’s announcement that its vaccine has proved 90% effective in trials gave investors a taste of the potential recovery to come,” said eToro analyst Adam Vettese.

“UK stocks – which have dramatically underperformed their US counterparts – delivered their best week since April, with the FTSE 100 gaining 6.9% and the FTSE 250 up 7.6%.

Remaining in the UK, Joshua Mahony, Senior Market Analyst at IG, says “With the Brexit deadline less than seven weeks away, the pound looks set for a period of increased volatility. Accelerated UK-EU discussions do raise some hope of a potential breakthrough, yet the fact that an agreement over policies such as fishing rights in the past 10-months doesn’t exactly instil confidence that the deadlock can be found.

“With the latest Rightmove HPI reading finally signalling a potential turning point in the market (worst reading this year), there is a fear that we start to see businesses and individuals hold off on major investment decisions as the risk of a disorderly exit from the EU becomes increasingly likely.”

In the US futures are also signalling a positive open, with the Dow Jones leading the way up just under 1%.

Vittese says, “Last week, some of 2020’s hardest-hit sectors bounced back sharply. The S&P 500’s energy, financials and industrials sectors gained 16.5%, 8.3% and 5.3% respectively.

“By comparison the information technology sector, which has gained more than 30% in 2020, was marginally in the red last week. Of note, however, is the fact that technology stocks pared their losses as the week wore on. While investors are eyeing a bounce back in demand for energy, international travel and more, many are taking the view that some of the pandemic-induced trends that tech firms have benefited from in 2020 will not fall back to their pre-COVID 19 state once a vaccine is widely available.

Looking at the Asian markets, “The latest economic data from Japan and China helped bolster the recovery theme, with the Asian rebound taking shape against a backdrop of continued success in keeping the virus relatively subdued,” Mahoney says.

“A 5% Q3 GDP figure from Japan may not seem entirely impressive given the recent figures throughout the US (33.1%), UK (15.5%), and eurozone (12.6%).

However, the comparatively smaller rebound in Japanese GDP highlights their success in minimising the Q2 contraction, with their ongoing success in controlling the virus likely to ensure a more steady and reliable recovery.

Tickers

Dow: +1.60%

NASDAQ: +0.80%

FTSE 100: + 1.66%

S&P 500: + 1.16%

DAX: 0.47%

CAC 40: 1.70%

Asia Dow: 1.80%

Nikkei 225: 2.05%

ASX 200: 1.23%

AUD: 0.73


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