Asia equities show resilience.

Given the meltdowns in markets around the world yesterday, Asia equity markets are showing surprising resilience today. The buy-the-dippers couldn’t resist and the Evergrande Charman’s soothing words appear to have lifted hopes, if not spirits temporarily.

 

Wall Street finished on a negative note, the S&P 500 sliding by 1.70%, the Nasdaq tumbling by 2.19%, and the Dow Jones retreating 1.79%. In Asia, however, futures on all three have rallied strongly by between 0.35% and 0.40%, which has perhaps also helped stabilise Asia with commodities also rallying.

 

Asian markets are mixed with Mainland China and South Korea closed today. The exception is Japan, where the Nikkei has played catch-up after being closed yesterday. The Nikkei 225 has fallen by 2.0%. Elsewhere though, the picture is mixed but could have been worse. Hong Kong is down just 0.90%, but Singapore has risen by 0.45%. Kuala Lumpur and Bangkok are flat, and Jakarta is down 0.60%.

 

Australian markets have completely unwound early losses as commodities, unloved yesterday, have rebounded sharply in Asia. The ASX 200 is down just 0.05%, while the All Ordinaries is now in positive territory, up by 0.15%. Sentiment was further boosted by the RBA minutes which suggested that no rate hikes were likely before 2024.

 

The dip-buying seen in Asia is likely to also lift European stocks this afternoon, particularly if US index futures maintain their strong gains this morning. I would remain cautious in the present climate however, and markets are probably just one headline away from an abrupt about face which will see investors hitting the sell button again. We can expect more of the same intra-day volatility throughout the rest of the week until Evergrande’s Thursday payment date.

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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