US markets retreat, Asia posts gains

Asian equities mixed

Refreshingly, Asian stock markets have not blindly followed the US markets’ retreat overnight. Across the Asia Pacific, it is a mixed bag this morning, with no unifying directional factors emerging from the press wires.

US markets fell late in the session after US Consumer Confidence underperformed. That was likely the excuse US markets needed to book some profits before the FOMC decision after a series of strong rallies in the previous sessions. The S&P 500 fell 0.65%, the Nasdaq fell 1.27% ahead of big Thursday’s tech results, and the Dow Jones eased 0.77% lower.

The Nikkei 225 has fallen by 0.73% this morning, contrasting with a 0.35% gain by the Kospi. Mainland China is also ignoring Wall Street, with the Shanghai Composite rising 1.30%, and CSI 300 jumping 1.70%. Hong Kong has also chiseled out a 0.30% gain despite the escalating movement restrictions as Covid-19 re-emerges in the SAR.

Across regional Asia, Singapore is 0.25% lower, while Kuala Lumpur has risen 0.30% with Jakarta flat thus far. Australia is having a moderate session with the AX 200 and All Ordinaries down just 0.25%.

Clues to the next big move in stocks may come from the Nasdaq, especially with Alphabet, Amazon, Apple and Facebook reporting on Thursday. The Nasdaq has carved a perfect double top on the daily charts at 11071. If big tech outperforms, but this resistance zone remains intact, it could signal that momentum is finally ebbing from world’s greatest FOMO trade. Technical support lies at around 10,300. A daily close below that level indicates a deeper correction to approximately 9,700 could occur.

Overall, most of Asia seems content to move into wait-and-see mode after substantial gains in recent days. With an FOMC rate decision and big-tech reporting on Thursday, pausing for breath makes eminent sense.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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