Wall Street Sinks Asian Equity Markets

US stocks slide on “Blue Wave” concerns

Wall Street endured one of its worst session in recent times overnight, as election jitters and the US stimulus impasse caused markets to blink that are heavily positioned for the “blue wave.” The S&P 500 fell 2.35%, the Nasdaq fell 2.05%, and the Dow Jones fell 2.28%. The after-market US index futures have eked out tiny gains this morning on profit-taking, but that has not been enough to stop Asia following Wall Street into the red in Tuesday trading.

The Nikkei 225 is 0.40% lower, with the Kospi the region’s outperformer, down only 0.10%. The Kospi’s outperformance is likely due to respectable advance GDP numbers out of South Korea today. China’s Shanghai Composite is 0.40% lower, and the CSI 300 is 0.15% lower.

The news is not so good elsewhere in Asia, with Singapore 0.65% lower and Hong Kong down 1.30%. Australia is the region’s worst performer today, the ASX 200 and All Ordinaries have fallen 1.80%.

Asian markets are benefiting from not buying so enthusiastically into the US stimulus trade as Wall Street. But with Covid-19 crushing European equities, and a re-pricing of risks now occurring in the US, Asia will not be immune. I continue to expect that risk will be taken off the table as the week progresses, meaning that rallies will be short in duration, with risks skewed to the downside.

Ant Financials’ IPO was priced at the very top end of expectations at HKD 80, with the book to close a day early due to demand. The stock is scheduled to start trading in Hong Kong on November the 5th, hopefully after the US election dust has settled. If it hasn’t, all those retail buyers on 20-1 leverage in Hong Kong could be in for an emotional wait for the start of trading. Those hoped-for leveraged easy profits may well be elusive as well.

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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