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%.

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