Asian equities rise as Wall Street recovers

Asian equities rebound on improved Wall Street sentiment

A well-received 20-year US bond auction swung the daily momentum back in favour of the bulls overnight on Wall Street, after two days of growling bears. The S&P 500 rallied by 0.93%, the Nasdaq jumped 1.19%, and the Dow Jones climbed by 0.94%.

The futures on all three indexes have retreated by around 0.15% in Asia, as various headlines about the need for vaccine booster shots and vaccine efficacy have circulated in the press. That hasn’t been enough to throw Asia’s retail fast-money day traders off their stride, though, as evidenced by the Nikkei 225 today. Having fallen over 2.0% yesterday as the herd ran for the exit door on Tokyo’s impending state of emergency, the Nikkei 225 has jumped by 2.10% today. That erases yesterday’s losses despite Tokyo still going into a state of emergency sometime next week, highlighting that speculative fast money flows, and not news, is driving short-term direction in equity markets.

Elsewhere, the Kospi is 0.50% higher, and Taipei has risen 0.80%. Mainland China’s Shanghai Composite and CSI ignore the noise yesterday, perhaps helped by national team buying. Today they remain almost unchanged as the PBOC left cash neutral, but USD/CNY slipped back below 6.5000.

Hong Kong has risen 0.40%, with Singapore 0.55% higher and Kuala Lumpur and Jakarta adding 0.45% so far this morning. Australian markets also had a modest day yesterday, and in much the same theme, both the ASX 200 and All Ordinaries are up only 0.30% today. Animal spirits in Sydney being tempered by a fall in US index futures in Asian trading today.

Over, stock markets globally continue to chop back on forth on whichever speculative momentum and sentiment is the more powerful on the day. A lack of clear new drivers has played its part with a lot of good news priced into equity valuation globally. Nerves that Covid-19 may linger for longer and vaccine effectiveness temper a buy-everything rally that is looking a little tired. All of which leads to the boisterous flip-flop price action seen this week. With the data calendar for the next two weeks chock-a-block with tier-1 data and central bank decisions, markets should find a lot more to sink their teeth into.

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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