Risks of a slowdown in the global economy may lower S&P / ASX 200 index
Australian stock prices fell amid signs of a slowdown in the global economy. Will the AU200 stock index fall?
In Australia, the Manufacturing PMI and Consumer Sentiment macroeconomic indicators decreased in March. Earlier, the US Federal Reserve announced the risks of a global recession, which may stop the rate hike policy. In March, China published very weak statistics for February. The trade balance surplus, the industrial production, the lending volume in RMB and a number of other indicators decreased. Note that banks account for 60% in the AU200 index capitalization, as well as industrial and mining companies. China is the main buyer of Australian raw materials. Australian banks may reduce revenues in case of a global rate cut. The next meeting of the Reserve Bank of Australia will take place on April 2. No changes in the rate (1.5%) are expected, but statements by representatives of the regulator may affect the dynamics of Australian stocks.
On the daily timeframe, AU200: D1 has left the uptrend and is trying to correct down. Most technical analysis indicators formed sell signals. A price decrease is possible in case of a slowdown in the global and Australian economies.
Summary of technical analysis
Position Sell
Sell stop Below 6100
Stop loss Above 6300
Australian stock prices fell amid signs of a slowdown in the global economy. Will the AU200 stock index fall?
In Australia, the Manufacturing PMI and Consumer Sentiment macroeconomic indicators decreased in March. Earlier, the US Federal Reserve announced the risks of a global recession, which may stop the rate hike policy. In March, China published very weak statistics for February. The trade balance surplus, the industrial production, the lending volume in RMB and a number of other indicators decreased. Note that banks account for 60% in the AU200 index capitalization, as well as industrial and mining companies. China is the main buyer of Australian raw materials. Australian banks may reduce revenues in case of a global rate cut. The next meeting of the Reserve Bank of Australia will take place on April 2. No changes in the rate (1.5%) are expected, but statements by representatives of the regulator may affect the dynamics of Australian stocks.
On the daily timeframe, AU200: D1 has left the uptrend and is trying to correct down. Most technical analysis indicators formed sell signals. A price decrease is possible in case of a slowdown in the global and Australian economies.
- The Parabolic Indicator gives a bearish signal.
- The Bollinger bands have narrowed, which indicates low volatility. The upper band is titled down.
- The RSI indicator is below 50. It has formed a negative divergence.
- The MACD indicator gives a bearish signal.
Summary of technical analysis
Position Sell
Sell stop Below 6100
Stop loss Above 6300