Asia stock markets mixed

US equities fall as stimulus talks stall

Despite the Door Dash IPO euphoria overnight, New York’s major indexes all closed lower, with the Nasdaq underperforming as Facebook shares fell on anti-trust lawsuits. A lack of progress on the US fiscal stimulus negotiations has tested investors’ patience, and the overnight session saw them take the risk of the board, pushing stocks lower. The S&P 500 fell 0.73%, the Nasdaq tumbled by 1.89%, and the Dow Jones edged lower by 0.30%. Vaccine hopes appear to be supporting legacy-industry-heavy indices such as the Dow, at the expense of the tech-heavy, work-from-home Nasdaq.

In Asia, the picture is a mixed one. The Nikkei 225 has fallen 0.30%, with the Kospi just 0.15% lower. In China, the Shanghai Composite and CSI 300 are 0.10% higher, with the Hang Seng down 0.30%. Singapore has fallen 0.40% and Taipei by 0.70%. However, Kuala Lumpur, Manila and Jakarta have all booked modest gains today. Australia has slavishly followed Wall Street lower, the ASX 200 and All Ordinaries falling 0.60%.

With a lack of headlines or data to drive markets in Asia, investors appear to be using the lull to reduce risk in some markets and rejig weightings in others. Short of a US stimulus breakthrough, that state of affairs is set to continue through Europe, ahead of the ECB meeting.

Later in the day, the European Central Bank holds its policy meeting and is likely to announce further monetary stimulus (12:45 GMT). With rates already negative, the ECB has little room to manoeuvre with rates. The bank is expected to extend the duration and increase the totals of its Pandemic Emergency Purchasing Programme (PEPP). Additionally, it may extend the -1.0% rate on its Targeted Longer-Term Refinancing Operations (TLTRO) and signal the launch of new TLTRO’s in 2021. All of that is mostly expected, with the ECB President Lagarde’s press conference likely to be a source of greater volatility. The ECB is likely to highlight positive numbers out of Germany and note the downside risks associated with the pandemic. Ms Lagarde may also express some discomfort with the euro’s appreciation, but any dips will probably be short-lived.

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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