Asia Morning Oct 8

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By :  ,  Financial Analyst

Asia Morning: U.S. Stocks Rebound on Reignited Stimulus Hopes

On Wednesday, U.S. stocks rebounded nearly 2%. The Dow Jones Industrial Average jumped 530 points (+1.91%) to 28303, the S&P 500 rose 58 points (+1.74%) to 3419, and the Nasdaq 100 gained 211 points (+1.88%) to 11503.

Dow Jones Industrial Average (Daily Chart): Challenging Key Resistance 28360

Sources: GAIN Capital, TradingView

U.S. President Donald Trump reversed an earlier stance and said he could sign partial fiscal stimulus bills from Congress. This helped to boost market sentiment.

Automobiles & Components (+4.14%), Transportation (+2.75%) and Retailing (+2.66%) sectors performed the best. Coty Inc (COTY +9.54%), Freeport-McMoRan (FCX +7.35%) and Alexion Pharmaceuticals (ALXN +7.97%) were top gainers. Airline stocks -- United Airlines (UAL +4.30%), American Airlines (AAL +4.31%) and Delta Air Lines (DAL +3.51%) -- also climbed.

Approximately 66% (69% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 65% (77% in the prior session) were trading above their 20-day moving average.

European stocks ended mixed. The Stoxx Europe 600 Index declined 0.12%, France's CAC 40 fell 0.27% and the U.K.'s FTSE 100 edged down 0.06%, while Germany's DAX 30 climbed 0.17%.

U.S. Treasuries came under pressure, as the benchmark 10-year Treasury yield rebounded to 0.785% from 0.740% Tuesday.

Spot gold price rebounded $9 (+0.49%) to $1,887.

U.S. WTI crude oil futures (November) sank 1.80% to $39.95 a barrel at the close.

On the forex front, the U.S. dollar turned weaker against other major currencies as investors expected a limited stimulus bill to be soon agreed by the government and Congress. The ICE Dollar Index retreated 0.26% to 93.61.

EUR/USD climbed 0.25% to 1.1762. Official data showed that Germany's industrial production declined 0.2% on month in August (+1.5% expected).

GBP/USD added 0.22% to 1.2920. Traders holding long positions on the pair were relieved by comments by European Union chief Brexit negotiator Michel Barnier that he does not expect the U.K. to walk out of the October 15 trade talks.

USD/JPY advanced 0.33% to 105.98. The pair is now above both 20-day and 50-day moving averages.

Commodity-linked currencies regained strength against the greenback. AUD/USD rebounded 0.52% to 0.7138, and USD/CAD slid 0.43% to 1.3255.

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