Asia follows a subdued Wall Street
Asian equity markets are drifting today in sympathy with the price action on Wall Street overnight. Wall Street once again marked down technology stocks as US 30-year yields moved sharply higher once again, while banking and energy outperformed. The S&P 500 closed just 0.17% higher, and the Nasdaq fell by another 0.50% as the Dow Jones rose by 0.55%. Futures on all three indexes have eased by around 0.20% in Asia.
Price action in Asian markets is broadly reflecting Wall Street. Japan’s Nikkei has slumped 1.55% on its return from holiday, while South Korea’s Kospi has fallen by 0.30% and Taipei by 0.25% reflecting their more tech-heavy makeup. In mainland China, the PBOC added liquidity via the repo today and that is providing some modest support. The Shanghai Composite is -0.10% lower with the narrower Shanghai 50, loaded with SOE heavyweights and banks, which has risen by 0.20%. The CSI 300 is just 0.10% higher and Hong Kong is unchanged.
ASEAN markets, which more closely resemble the Dow Jones and S&P in makeup, have risen modestly. Singapore is 0.20% higher, Kuala Lumpur is unchanged, and Jakarta is up just 0.05%. Manila is flat while Bangkok has risen by 0.65%. Australian markets are also marching on the spot with the ASX 200 and All Ordinaries flat for the session. A post RBNZ rate hike fall by the kiwi and an impending easing of international visitor restrictions has left the NZX50 up 0.35%.
European markets were crushed on fourth wave delta concerns yesterday, and I expect that sentiment to persist throughout today’s session as well, particularly as Wall Street is providing no strong lead. A weak German IFO will add to the dark clouds as will announcements of further movement restrictions from major European governments. Wall Street will be awaiting the US PCE and Durable Goods data this afternoon before heading for the door early for Thanksgiving. Only a series of low prints, easing inflation concerns, is likely to change the cautious narrative in US stock markets this week.
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