Asian markets in choppy waters

Asian equities are impressively resilient

US futures were crushed at the Asian open this morning, unwinding all of Friday’s impressive gains. Since then, US index futures have pared some of those initial losses, while several key Asian markets are actually trading in positive territory.

Futures on the S&P 500 are 1.20% lower, while the Nasdaq has tumbled by 1.85%. The Dow Jones has suffered the most, its components having the greatest exposure to skyrocketing energy and commodity prices. Dow futures had retreated 2.05% lower in Asia.

Asian markets are telling a rather different story, based I believe, on SWIFT restrictions not blocking financial flows for energy and commodity exports from Russia, and hopes that the Ukraine-Russia meeting today yields some progress on ending the war. Additionally, China’s PBOC has injected a massive CNY 300 bio of liquidity into local markets today via the 7-day repo, to steady nerves.

That has all left Asian markets trading in a very choppy manner each side of unchanged. The Nikkei 225 is 0.30% higher, with South Korea’s Kospi rising 0.40%. In mainland China, the Shanghai Composite has fallen 0.40% after rising earlier, while the CSI 300 has also fallen by 0.75%, after rising earlier. Hong Kong is down 0.80%.

Singapore is down 0.70%, with Kuala Lumpur jumping 1.10%, likely on the commodity and energy rally. Markets in Taiwan and Indonesia are closed today. Like Kuala Lumpur, Australian markets are also higher. The ASX 200 and All Ordinaries have climbed by 0.50%.

Although Asian markets are chasing their tails somewhat today, with very choppy price action seen, it is notable that we are not seeing a stock meltdown after the weekend’s developments. Europe is unlikely to fare as well given that the actions by the EU and Germany suggest they are prepared to accept more economic pain to bring Russia to heel. European stocks are likely to open sharply lower and reverse Friday’s gains unless we get a positive surprise from the Ukraine-Russia meeting today.

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