Asian equities start week with gains

Equities race higher on vaccines and stimulus

Friday saw another chaotic day on Wall Street, with the Nasdaq finishing higher while the S&P 500 and Dow Jones continued falling. It is all about the J&J vaccine re-energising the global recovery trade today in Asia, though, with regional markets rallying strongly.

South Korea and Taiwan are closed today, but the Nikkei 225 has leapt by 2.10%. China’s Shanghai Composite has risen 0.50%, with the CSI 300 climbing by 1.10%. The Hang Seng is 1.10% higher ahead of expected changes in its composition to be announced later today. With markets freshly vaccinated with the latest buy everything potion, they were able to shrug off a very mixed bag of China and pan-Asia manufacturing PMI’s this morning. China released official manufacturing and services PMI’s yesterday, which disappointed, as did the Manufacturing PMIs across the rest of Asia.

Singapore has rallied by 0.90%, with Kuala Lumpur flat, and Jakarta 0.70% higher. Australia’s ASX 200 has jumped 1.40%, and the All Ordinaries have risen by 1.0% as commodity prices jump in Asia today.

Although the week has started on a positive note, the recovery is far less vaccine-powered than we have seen in times past. Europe will reluctantly follow suit, but the heavy data and event risk calendar, the US stimulus bill all provide plenty of fodder for the inflation vigilantes to reappear. Today’s rally looks like a mechanical reaction to the J&J news, but markets have not shaken off the trauma and doubts of last week yet.

It is noteworthy that the US House of Representatives passed the Biden USD1.90 trillion stimulus package on Saturday by a narrow margin. The bill will now move on to a much more challenging reading in the Senate, although the minimum wage hike’s dropping should ease its passage before the March 14th deadline expiry of the previous stimulus measures.

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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