Asian equities power higher

Asia follows Wall Street and heads higher

The buy the dip hoards returned to the fray on Wall Street overnight, with technology and energy sectors notable outperformers led by Tesla, of course. The S&P 500 rose 1.60% on the Nasdaq’s coattails, which leapt to a 2.55% gain. The Dow Jones lagging but still recording a 0.77% gain. There was a clear tech/cyclical divide overnight and repeated in Asia today, which saw similar price action yesterday.

US index futures have rallied by around 0.50% this morning, greenlighting further outperformance by the Northern Asia over cyclical ASEAN. The Nikkei 225 is 0.95% higher, with the Kospi jumping 1.40%, aided by additional domestic stimulus expectations. Mainland China’s Shanghai Composite has risen by 0.45%, with the CSI 300 climbing 0.15%. A wall of Chinese retail money has lifted the Hang Seng by 1.62%, the listing home of many Chinese tech giants. Taipei, meanwhile, has rallied an impressive 2.25%.

Singapore has climbed 0.70%, with Kuala Lumpur rising 0.85% with Jakarta up 0.25%, and Manilla rising 1.25% after some torrid sessions.

In Australia, the Reserve Bank of Australia was in the spotlight, and any thoughts that the central bank might turn hawkish were dashed. The RBA  left the benchmark unchanged at 0.10% as expected. Things get interesting after that, though. The central bank has committed to buying another AUD 100 billion of government and state bonds once its present programme is completed in January. The bank added that it does not expect to hike interest rates prior to 2024. The dovish RBA and higher silver prices have listed the All Ordinaries by 1.35%, with the ASX 200 leaping 1.50%.

Equity markets have ignored a much stronger US dollar overnight, suggesting that for now, the equity correction lower has run its course. Only some serious wobbles in the US fiscal stimulus outlook or a very poor Non-Farm Payrolls on Friday are likely to knock equities off track for now, with the dip buyers firmly in control.

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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