Asia ignores overnight US equity rally

Asian markets in cautious mode

A wave of caution is sweeping the North Asia heavyweights today, and as usual, it seems to have spurred a rotation into ASEAN markets further south. That has seen Japan, South Korea and China ignoring yet another rally on Wall Street overnight. With markets moving into lower-for-longer mode, the rate-sensitive Nasdaq and S&P 500 outperformed, while the Dow Jones suffered. The S&P 500 finished 0.42% higher, with the Nasdaq jumping 0.81%, while the Dow Jones lagged, rising just 0.09%. Futures on all three are steady in Asia.

 

In Japan, nerves around the makeup of the fiscal stimulus package have spurred profit-taking. The Nikkei 225 has fallen 0.75%, with South Korea’s Kospi down 0.55%. In China, the Shanghai Composite has fallen on wealth management concerns, edging 0.25% lower. The CSI 300, by contrast, has risen by 0.20%. China property nerves are front and centre in Hong Kong, with the Hang Seng retreating by 0.95%. Tech-centric Taipei has increased by 0.25%.

 

Singapore has climbed by 0.60% in regional markets on strong bank earnings, with Kuala Lumpur edging 0.20% lower as oil prices remain pressured. Bangkok and Jakarta are flat, while Manila has leapt 1.65% higher after benign inflation numbers and a dollop of IPO-mania. Australian markets are also in the green, helped along by a dovish RBA this week and another overnight rally on Wall Street. The ASX 200 and All Ordinaries are 0.50% higher.

 

Europe’s data calendar lacks tier-1 releases today and will likely open higher on the back of a strong Wall Street finish. Three Bank of England speakers today will bring some volatility to UK equities after yesterday’s surprise policy decision. Overall, I expect activity to be muted this afternoon in Asia and Europe as the market awaits this evening US jobs print.

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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