Asian equities drift higher

US earnings lift Wall Street

Wall Street once again rose overnight, as Monday’s delta-dip became buy-the-dip, supported by strong US corporate earnings. The S&P 500 rose 0.82%, with the Nasdaq climbing 0.92% and the Dow Jones finishing 0.83% higher. US markets shrugged off the procedural defeat of the US infrastructure bill in the Senate as administrative, with the real fireworks to come next week.

 

Although Japan markets are closed, the rest of Asia has contented itself with hitching its wagon to the Wall Street rally with headline drivers and data points thin on the ground today. The Kospi has jumped 1.10%, as strong US earnings boosted major stocks in Seoul. The Shanghai Composite is 0.30% higher in China, and the CSI 300 is 0.10% higher. Hong Kong has leapt 1.75%, dragged higher by the Evergrande rollercoaster. The property developers share jumping 10% at one stage after it said it had “resolved” some issues with lenders on some of its projects. Expect China technology and property stocks to keep Hang Seng volatility alive and well.

 

Singapore has also leapt 1.30% higher today, with Kuala Lumpur climbing 0.55% and Jakarta rallying by 1.20%. Bangkok has risen 0.20%, with Manila jumping by 1.30% and Taiwan climbing by 0.85%. Australia’s ASX 200 is 1.05% higher, with the All Ordinaries rising by 0.90%.

 

Given that the Covid-19 issues sweeping Asia have not gone away, and in fact, you could argue they have got worse, the breadth of the Asia-Pacific rally is quite surprising. I attribute it to a combination of complacency, a slow news day, and pent-up buying demand leading to fast-money retail flows piling back into the market. Assuming the music keeps playing in Europe and the US tonight, Asia could well finish the week on a positive note. I will note that fast-money flows are just that, and the winds could change direction very quickly in these types of markets. Investors who insist on playing should remain light on their feet.

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
Jeffrey Halley

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