Asian markets sharply higher

Asian equity investors get bored with selling

US markets gave Asia no lead overnight, with US equities falling intra-day before recovering to finish slightly lower. Part of the reason for the cautious finish by Wall Street may have been remarks from Fed FOMC member Robert Kaplan, who raised the possibility of tapering and rate hikes in 2022.  The S&P 500 finished down 0.16%, the Nasdaq fell 0.38%, and the Dow Jones eased by 0.25%. In Asian trading, the futures on all three indices have quickly erased those small losses.

The rise in the US index futures has greenlighted the fast money in Asia to hit the buy button today. Nothing has materially changed overnight, but with the Covid-19 nerves steadied from yesterday, regional fast-money investors look bored with selling and have reversed course today.

Nowhere is that more evident than in Japan, where the Nikkei 225 has leapt by 2.10%. The fast-money gnomes have been equally busy elsewhere, with the Kospi rising by 1.15% and Hong Kong by 1.25%. China remains a modicum of calm by contrast. Having outperformed yesterday and over the last week, thanks, I suspect, to the national team being on the bid, the Shanghai Composite and CSI 300 are 0.25% lower this morning.

Singapore has jumped by 1.30%, with bargain hunters out in force after a torrid week. Taiwan is the star of the show, though, with local markets having been crushed by the Covid-19 outbreak in the sessions previously. In scenes reminiscent of queues waiting outside a department store for a Black Friday sale, the Taiex has leapt 4.05% higher this morning. Bangkok is 1.0% higher, while Kuala Lumpur is flat, and Jakarta is 0.35% lower. Australia’s ASX 200 and All Ordinaries have climbed by 0.45%.

Asia’s performance should set up Europe for a positive start later today. With the worst performers in Asia being the best ones by a country mile today, the lesson here is that an ocean of money still waits on the sidelines to buy equities on material pullbacks, Covid-19 be damned.

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