Daily Stocks Update: Brexit Fears and Oil Headlines – Feb 19, 2016

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Daily Stocks Update: Equities Retreat on Profit-Taking, Commodity Slump

Asian markets welcomed the news of China’s stock market leadership change positively, as futures and equities are in the green. Over the weekend, China dismissed China Securities Regulatory Commission Chairman Xiao Gang from his post and replaced him with Liu Shiyu.

The Nikkei 225 index is up 148.65 points to 16,115.82 (+0.93%) and its futures are up 133 points (+0.88%), the China A50 index is up 162.33 points to 9,161.01 (+1.80%) and its futures are up 153.50 points to 9,056.00 (+1.72%), the S&P ASX 200 index is up 47.60 points to 5,000.40 (+0.96%) and its futures are up 48 points (+0.98%).

The commodity price bounce is also keeping markets in risk-on mode so far, as the fall in the number of US production rigs in use suggested that the supply glut could ease. However, an Iranian official also confirmed that they had been able to successfully increase output by 500,000 barrels per day since the lifting of the Western sanctions earlier this year, lowering the odds that an agreement on a production cap could be reached.

European investors wary of flash PMI readings and Brexit

While the British pound managed a strong bounce by the end of the week after UK Prime Minister David Cameron announced that they drafted a deal with the EU, this is still up for a referendum in June so the uncertainty surrounding a British exit remains. The London FTSE closed 21.72 points down to 5,950.23 (-0.36%) while futures are up 40.7 points (+0.69%).

The German DAX closed 75.59 points down to 9,388.05 (-0.80%) and its futures are up 72 points (+0.77%) while the French CAC 40 closed 16.72 points down to 4,223.04 (-0.39%) and its futures are up 36.8 points (+0.87%).

Euro zone flash manufacturing and services PMI reports are due today and signs of an improvement could keep equity indices and futures afloat. On the other hand, sharper contractions or slower expansions could force these assets to retreat.

US equities advance on upbeat CPI

Stock indices in the US ended the day mixed, even though the CPI reports printed slightly stronger than expected results. The headline CPI stayed flat instead of declining by the projected 0.1% figure while the core CPI posted a 0.3% gain versus the projected 0.2% uptick.

The S&P 500 index closed 0.05 points down to 1,917.78 (-0.01%) but the Nasdaq managed to squeeze a gain of 16.9 points to 4,504.4 (+0.38%). S&P 500 index futures are up 0.61% and Nasdaq futures are up 0.70% so far.