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Asian equities move modestly higher

Asian equities move modestly higher

US markets played catchup to the Asian rally overnight, posting very impressive results overnight. The S&P 500 rose by 2.38%, the Nasdaq leapt 3.01%, and the Dow Jones rallied by 1.95%. Some profit-taking is evident in Asia, though, with the markets taking a breather. The futures on all three indexes lower by between 0.20% and 0.30%.

Having led the world higher yesterday, by virtue of being the first region to open, Asian markets are only recording modest gains today, not helped by the US index futures also easing slightly. The exceptions are South Korea and Taiwan, who were on holiday yesterday. The Kospi has jumped by 1.86%, and Taipei is 1.60% higher. On Tuesday, South Korean and Taiwan Manufacturing PMI’s rose further into expansionary territory.

Elsewhere though, the picture is mixed for Asia, with some profit-taking evident after the strong outperformance yesterday. The Nikkei 225 is down 0.75%, with the Shanghai Composite 0.70% lower, with the CSI 300 down 0.85%.

Hong Kong has fallen by 1.0%, while Singapore and Jakarta have climbed by 0.25%, with Kuala Lumpur rising 0.75%. Australia’s ASX 200 and All Ordinaries are clinging on to 0.15% gains. Australian data was a mixed bag, as Current Account outperformed, but Building Permits collapsed with a decline of almost 20 per cent.

Notably, the biggest falls are in markets with the largest retail exuberance quota and suggest a temporary lull in momentum, not a structural turn in sentiment. European markets are likely to ease in sympathy as we all wait and see what mood Wall Street is in today when it arrives.

In the United States where the picture paints a rapidly recovering economy on all fronts. Shortly to be juiced by another USD1.9 trillion fiscal stimulus package. Inflationary pressures receding? I don’t think so, and if this Friday’s Non-Farm Payrolls will be a significant test for the economy. If NFP outperforms, equity markets may find themselves stress-tested again.

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 [4]

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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