Asian equities regain their poise

Asian markets mixed as investors digest FOMC

Wall Street was mixed overnight with the Dow Jones, whose components probably have the highest beta to a stronger US dollar, falling commodity prices, and Fed tapering, being the worst performer. It finished the day 0.62% lower, with the S&P 500 almost unchanged. By contrast, the Nasdaq powered higher to gain 0.87%, and it seems Wall Street’s response to a much-changed FOMC tone and dot plot is to reverse out of the global recovery trade for now.

With today being futures and options expiry day on Wall Street, the aftermarkets futures have been quiet, but all three indexes have managed to rise by around 0.10% in Asian trading. That, combined with an unchanged BoJ, has calmed any nerves in Asia, with markets loosely following the tech/cyclical recovery rotation seen on Wall Street overnight.

That sees Nikkei 225 and Kospi are up by 0.20%, while Taipei is unchanged. Mainland China’s Shanghai Composite and CSI 300 have fallen by 0.45% after being unusually steady yesterday, but Hong Kong, heavy with China-tech heavyweights, has climbed by 0.50%.

Unsurprisingly, cyclical ASEAN is mostly lower with the Dow Jones. Singapore has fallen 0.25%, Bangkok by 0.30%, and Jakarta by 0.90%, while Kuala Lumpur bucks the trend, rising 0.15%. Tech and medical names are leading Australian markets higher today, even as miners sag, with the ASX 200 and All Ordinaries both 0.45% higher.

An inconclusive Wall Street session has left Asia to its own devices on a local basis, where the cyclical rotation seen overnight has prevailed to a lesser degree. That rotation probably sets Europe up for a slightly weaker opening with little data in that region to rock the boat today.

It’s a light global data calendar today, with only UK Retail Sales of passing interest. However, Monday’s Australian Retail Sales and China’s one and five-year Loan Prime Rate decisions may raise temperatures slightly. Otherwise, I expect markets today will be driven by headlines with more than a few eyes watching how US equities finish the week.

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