Asian equities follow Wall Street gently higher

Wall Street rises on technical stocks

The S&P 500 and Nasdaq made new record highs overnight, led by big-tech naturally, and strong quarterly results from big-box retailers. When all was said and done though, the gains were modest in scope, with both indices creeping into new highs, not exploding higher. Part of that tentativeness may be the fall in the US dollar, and the continuing stimulus standoff on Capitol Hill, with investors worried that Q2 might end up being the best of a bad bunch.

The S&P 500 rose 0.23%, the Nasdaq rose 0.73%, led by gains in Amazon, but the Dow Jones edged lower by 0.24%, weighed down by a fall in banking stocks. Despite the buy everything, FOMO exuberance sweeping the markets, further gains from here will probably be more of a slow grind higher than a sprint. Nevertheless, the foundations of the most counterintuitive rally in history remain firmly in place.

Hong Kong is closed until midday due to a typhoon, but elsewhere, Asian markets have mostly followed Wall Street higher in a modest fashion. The Nikkei 225 has climbed 0.25%, with the Kospi up 0.55%. Potential trade tensions are weighing on Chinese stocks initially after more Trump rhetoric overnight. The Shanghai Composite and CSI 300 are down 0.40%.

Across Asia, Singapore, Jakarta and Kuala Lumpur are flat. Taiwan is up 0.25%, with Australia’s All Ordinaries and ASX 200 both 0.90% higher. Trade concerns between the US and China appear to be hanging more heavily with Asia, as is the general appreciation of their currencies overnight versus the US dollar.

The fall in the US dollar is likely to mute gains in Europe this afternoon, at least initially. However, the search for yield and hopes of a global recovery should ensure that European and Asian markets continue to follow their Wall Street counterparts to some extent.

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 and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley