Equities paint a mixed picture in Asia

Asian stocks mixed despite US tech gains

In the US, after-market trading was higher, courtesy of strong numbers from the “gang of four”. Alphabet, Amazon, Apple and Facebook all hit match-winning home runs with the release of their Q2 earnings in after-hours trading. Of the four, only Alphabet suffered a sales drop, and even that was less than expected. The other three showed impressive gains and blew forecasts out of the water.

The Shanghai Composite is rising 0.80%, while the CSI 300 and Hang Seng are flat for the session. Elsewhere though, the picture is less rosy. Covid-19 concerns, the weak US GDP data and a much stronger yen on currency markets has seen the Nikkei 225 fall 2.20% today. Much the same story is being told in Australia, where Covid-19 transmissions continue in their hundreds in Victoria. More concerning, community transmission in Sydney remain at stubborn levels. The ASX 200 and All Ordinaries are both 1.40% lower.

In China, Manufacturing and Non-Manufacturing PMI’s for July. Manufacturing crept higher to 51.1, while Non-Manufacturing fell 0.2 to 54.2. Most importantly, both remain comfortably in expansionary territory.

Despite a slew of holidays across Asia today, the data calendar has been quite busy for the region. Australian PPI underperformed, emphasising that deflation, and not inflation, is the enemy at the moment. South Korean Industrial and Manufacturing Production were both negative, but only modestly so for June. What is important is that both made massive gains over May’s numbers, implying a slow, but steady recovery is on track. Even in Japan, June Industrial Production managed to show a MoM gain.

With most of South East Asia on holiday today, activity in the region is muted. The after-hour results from US big-tech should limit the fall-out on European stock markets this afternoon. However, sectors with exposure to the real economy, versus the digital one, are still likely to feel the chill winds of the US GDP reality check from overnight.

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
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is 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, Channel News Asia as well as in leading print publications including 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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