Asia in mixed territory after Wall Street surges
Another day, another record close for Wall Street, as strong corporate earnings and subdued US yields keeps the party going. The S&P 500 rose 0.82%, the Nasdaq climbed 0.55%, while the Dow Jones finished a respectable 0.80% higher. Delta nerves have been pushed to the sidelines once again, and the US Infrastructure Bill continues to make progress, it seems.
In Asia, it has been a mixed day notable for the dip-buyers in China equities. After yesterday’s “spiritual opium” comments from the government press and a new enquiry into auto semiconductors sparked a panicked sell-off in tech heavyweights, the irresistible lure of seemingly cheap China shares has buyers back once again. The Shanghai Composite has risen 0.75%, with the CSI 300 climbing 0.65%. The tail-chasing herd have lifted the Hang Seng by 1.15%. Today’s bargain is tomorrow’s expensive mistake with China at the moment, and the rebalancing between price and regulatory risk still has some way to go, I believe.
Japan’s worsening Covid-19 outlook is weighing on the Nikkei 225 today, which is 0.25% lower, but the Kospi has leapt by 1.15%, with Taipei climbing 0.40%. Singapore has risen by 1.0%, boosted by excellent results from banking heavyweights UOB and OCBC. The Singapore banking sector has long been a favourite, with well run, well-capitalised and digitally savvy incumbents that are well-placed to benefit from both Singapore and the region’s recovery, even if it is slower than hoped. A Singapore Airlines A380 filmed lifting off from desert storage to return home sees the share price 1.40% higher today in the hopes of better times ahead.
Elsewhere, Covid-19 and political turmoil see Kuala Lumpur falling 0.80%, with Malaysia one of my fragile four. Until one of those things changes materially to the positive side, it shall remain there. Jakarta has risen by 0.30%, while Bangkok has eased by 0.40%, with Manila climbing 0.40% and quietly outperforming this week. Australian markets have followed Wall Street higher, as is their want, although the ongoing Covid-19 situation is tempering the bulls. The ASX 200 and All Ordinaries are finishing the day 0.35% higher.
European stock markets should take their cues once again from Wall Street to open higher shortly.
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