- ASX 200 Index battles with a key resistance level on a key data week ahead.
- Projections of weaker demand weigh on sentiment in the commodity-complex.
ASX 200 Index, the Australian share market, is starting out offered as profits are taken on a key week for markets as data starts to hit the screens from the lockdown period.
On Friday, the ASX 200 futures closed up just 0.02 per cent ahead of a more positive close in US stocks as traders ride the optimism for a cure for COVID-19 and prospects of the US economy starting up again as lockdown measures are eased. The optimism has so far failed to follow through in Australasia. the S&P/ASX200 benchmark index is down 86 points, or 1.57% to 5,401.50 points with energy stocks and property trusts hurting the most.
ASX 200 Index: Commodity complex under pressure
Caltex Australia, -8% at the time of writing, has been leading the energy sector decline following a sharp drop in the oil prices in Asia. WTI plummeted to fresh lows of $14.67. This came at this same time that the Canadian firm Alimentation Couche-Tard put its $8.8 billion takeover offer on ice. Woodside Petroleum, Beach Energy, Origin, Santos and Oil Search were also down on the oil price news.
Projections of weaker demand weigh on sentiment in the commodity market, specifically oil. “Despite the OPEC+ alliance agreeing to an unprecedented cut in output, the physical market is awash with oil. Concern continues to mount that storage facilities in the US will run out of capacity. EIA data last week showed that inventories rose by19.25mbbl last week,” analysts at ANZ Bank explained.
ASX 200 Index: Technical picture
The ASX 200 remains in battle mode with the 38.2% Fibonacci level. 5645 as the next resistance structure is still on the map though. To the downside, bulls will look for the 5090s support structure to hold.
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