ASX200 rebounds on proposed Biden-Putin summit

Australian flag

The local market’s resilience has again been on display this morning, recovering from an early 66-point loss on reports that Presidents Biden and Putin have agreed “in principle” to a summit on the condition that Russia does not invade Ukraine.

With details of the timing and format of the summit still to be confirmed, the proposed summit does allow local investors the opportunity to refocus on matters closer to home.

Over 70% of the ASX200 by market capitalisation have now reported earnings and thus far it appears companies have been able to weather the Delta and Omicron waves much better than feared.

According to U.S. investment bank Morgan Stanley , earnings beats lead misses by 1.8:1 ahead of reports this week from household names including Coles (COL), Rio Tinto (RIO) Preview here as well as Woolworths (WOW), Preview here, Qantas (QAN) Preview here and Flight Centre (FLT) Preview here.

Also of key macro interest, the release on Wednesday of the 4Q Wage Price Index. For inflation to return sustainably to within the RBA’s 2-3% band and as a prerequisite for a rate hike, the RBA has noted wages growth needs to lift to 3-3.5%. The market is looking for a 0.7% q/q rise, taking the annual rate to 2.4%, leaving a rate hike unlikely until the second half of 2022.

Turning to the charts, the Weekly and Daily charts, as noted last week here are in conflict - the Weekly chart is bullish, while the Daily chart is bearish. As such, we continue to use the 200-day moving average at 7331 as the Pivot. Bearish while below 7331 and bullish on consecutive daily closes above.

ASX200 Daily chart 21st of Feb

Source Tradingview. The figures stated areas of February 21st, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar