Asian markets mixed

Weaker omicron hopes lessen Friday fallout on Asian equities

Asian equities are having a mixed day today after US index futures rallied this morning in hopes that omicron is a milder variant. That came after another torrid Wall Street session, where mixed signals from US employment data led to higher Fed tapering nerves mixed in with negative omicron sentiment. On Friday, the S&P 500 fell by 0.84%, the Nasdaq slumped by 1.92% and the Dow Jones outperformed, falling just 0.19%. A faster Fed taper and early rate hikes clearly benefit value versus growth at the moment, with the US yield curve flattening once again.

An abrupt reversal has occurred on initial reports that omicron is a weaker variant. Dow Jones futures have jumped by 0.65% today, while S&P 500 futures are 0.50% higher, with Nasdaq futures lagging, rising just 0.15%. It seems that positive omicron news will be expressed further by value outperforming growth against the background of a more hawkish FOMC.

That has taken the edge of Asian markets as well with the Nikkei 225 falling just 0.45% today, led by a 9.0% slump by Softbank. South Korea’s Kospi, by contrast, is 0.10% higher. Mainland China is outperforming after comments from officials and press over the weekend raised expectations of an imminent RRR cut and more lending. China’s “national team’ may also be around, “smoothing” markets. That sees the Shanghai Composite rising by 0.65% today, with the CSI 300 climbing 0.35%.

Hong Kong markets are enduring a torrid session with China big-tech stocks being hammered once again on delisting and crackdown nerves. Evergrande’s day of truth sees it trading 10% lower as well. The Hang Seng is down by 1.20%.

Regionally, Singapore is 0.80% higher, whiles Kuala Lumpur has fallen by 0.45% and Jakarta has risen by 0.55%. Taipei is 0.30% lower, with Manila rising by 1.20% and Bangkok falling 0.45%. Australian markets have also edged lower, the ASX 200 easing by 0.15%, and the All Ordinaries moving 0.30% lower.

Hong Kong aside, the positive omicron headlines, have encouraged Asian buy-the-dippers back into the market today, albeit unevenly. European markets are likely to seize on the omicron-is-weaker hopes as well and I expect Europe and the UK to open quite positively this afternoon. As ever, market direction and sentiment remains fragile. Although markets are desperate to grasp at any straws of hope on the virus front, we are one headline away from the straw being taken from our grasp and direction changing abruptly.

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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