Wall Street losses echoed in Asia

Asian equities edge lower in sympathy with Wall Street

Wall Street ran out of upward momentum overnight after a series of impressive buy-everything sessions over the past week. The price action looks corrective and not structural, but the S&P 500 finished 0.68% lower, the Nasdaq lost 0.92%, and the Dow Jones fell by 0.75%. US index futures have continued south, adding to exit door clamour in Asia.

Japan is leading the region lower, and the Nikkei’s travails appear to be spilling over into other regional bourses to a lesser extent. The Nikkei 225 has fallen 2.10% after the government announced that Tokyo would enter a Covid-19 state of emergency starting on the 29th of April. I am slightly confused as to why Tokyo, having asked for the declaration, needs a whole week’s notice of it starting. Doubts are no doubt resurfacing that the Olympic Games will be imperilled if the situation continues to escalate.

Elsewhere regional markets are on the back foot as well, with the Kospi falling by 1.40% and the Hang Seng falling by 1.70%. Notably, mainland China’s Shanghai Composite and CSI 300 are unchanged in a sea of red today, hinting that China’s state-backed “national team” is “smoothing” bearish volatility.

Singapore has fallen by 1.30%, while Kuala Lumpur and Bangkok are 0.40% lower, with Jakarta down 0.60%. Australia’s All Ordinaries has declined 1.10%, with the ASX 200 falling by 1.30%.

Overall, the price action looks corrective after a strong performance over the past week by equities in a market being driven by short-term risk sentiment. A thin data calendar means that the status quo is likely to continue for the remainder of the week, although markets will have more to get their teeth into over the next two weeks, including rate decisions from the Bank of Japan and the FOMC. As long as US 10-year yields remain stable, buying the dip will likely win the day on a weekly horizon.

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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