Fed, Omicron weigh on Asia markets

Omicron and US politics send Asia stocks lower

As outlined above, a combination of increasing omicron nerves, particularly in the UK and Europe, and the failure of President Biden’s spending plan to pass muster with Senator Manchin has seen Asian equities head directly south in sympathy with Wall Street’s Friday finish. The China LPR cut rally lasted just minutes in mainland China, highlighting the path of least resistance in Asia today.

On Friday, hawkish comments from Fed officials and omicron nerves sent Wall Street lower. The S&P 500 fall by 1.03%, with the Nasdaq holding its own, edging just 0.07% lower. Value took a bashing on Friday, the Dow Jones tumbling by 1.48% as the schizophrenic tail-chasing of the FOMO-gnomes showed no sign of waning this month. The Build Back Better failure has torpedoed US index futures today. S&P 500 futures are 1.0% lower, Nasdaq futures have plummeted by 1.15%, while Dow futures have fallen by 0.80%.

That sees Japan’s Nikkei 225 tumbling by 1.85% with South Korea’s Kospi lower by 1.50%. Mainland China’s LPR rally lasted minutes before risk aversion internationally, and fears of more government clampdowns domestically sent equities sharply lower. The Shanghai Composite is just 0.40% lower now, but the CSI 300 is down by 1.0%. China’s “national team” may be “stabilising” today. Hong Kong, by contrast, has recovered some early losses, but is still looking fragile, down 1.10% thus far.

Regional markets look no better. Singapore has fallen by 1.05%, complicated by Singtel losing a taxation case in Australia. Taipei has fallen by 0.85% while Kuala Lumpur is 0.40% lower, and Jakarta has retreated by 0.65%. Manila is 1.30%, also suffering a typhoon discount today after the weekend’s landfall, with Bangkok 1.10% in the red. By contrast, Australian markets are holding their own, helped perhaps by a lower Australian dollar. The ASX 200 is just 0.15% lower, while the All Ordinaries has fallen a relatively modest 0.35%.

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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