Asia struggles to follow the Nasdaq’s lead

Australia records recession but equities higher

Asia-Pacific stock markets are mixed today, struggling to follow Wall Street’s overnight lead. Asian investors appear content to book profits with the news wires quiet, awaiting tier-one data from China tomorrow and the US on Friday.

Overnight, big tech continued its inexorable march higher, lifting both the S&P500 and Nasdaq to fresh record highs after upbeat US data. The S&P 500 rose 0.75%, with the Nasdaq jumping 1.39% and the Dow Jones climbing 0.76%.

In the Asia-Pacific, the Australian markets have rebounded strongly from yesterday’s sell-off despite data showing Australia entered a technical recession in Q2. As expected, the RBA kept rates at a low 0.25%, where they have been pegged since March. Expectations of a rapid rebound, dovish comments from RBA officials and China confining its displeasure to peripheral exports have seen the ASX 200, and All Ordinaries climb nearly 2.0% today. The price action is suggesting that a lot of herd-like fast money is driving price movements down under for now.

Australia’s stock markets rebounded after slumping on Tuesday. Equities rallied despite a plethora of adverse headline risk. Investors shrugged off the second straight decline in Australia’s GDP, which is officially indicative of a recession. The recession is expected to be short-lived and the core of Australia’s exports to China left unmolested by Beijing.

Across Asia, the picture is somewhat more muted as investors await developments elsewhere. Japan and Kuala Lumpur are 0.30% higher, while mainland China exchanges, Hong Kong and Singapore are around 0.50% lower. South Korea, Thailand and Indonesia are all flat for the session.

With Asia adopting a wait and see approach, activity is likely to remain directionless for the remainder of the session, with Europe likely to follow suit. Markets will be vulnerable to short-term headline-driven moves ahead of US data this evening.

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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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