Asian equities follow US markets south

Asian markets fall as oil prices surge

Surging oil prices overnight sparked global growth fears as the Ukraine-Russia situation intensified and oil supply chains were thrown into chaos over sanctions. That reversed the peak-Ukraine rally of the day before and sent US markets tumbling. The S&P 500 fell 1.55%, the Nasdaq fell 1.59%, and the Dow Jones tumbled by 1.78%.

In Asia, some short-covering has lifted futures on all three indexes by around 0.30%, but Asian markets have followed New York’s lead and headed south as oil prices jumped once again this morning. Japan’s Nikkei 225 is down by 2.0%, but South Korea’s Kospi is holding its own after returning from a holiday yesterday, rising just 0.10%.

The good news ends there with China’s Shanghai Composite down 0.40% and the CSI 300 falling by 1.05% after the PBOC also drained liquidity today. Hong Kong is also 1.0% lower. Singapore is down 0.50%, with Taipei 0.40% lower. Jakarta is down by 0.50% and Kuala Lumpur by 0.20%, Bangkok is unchanged, and Manila is 0.80% in the red. Australian markets, boosted by surges in commodity and energy prices, are marginally higher. The ASX 200 is 0.05% in the green, and the All Ordinaries has risen by 0.25%.

Asian markets have been aided by the slight rise in US futures today, but it is likely to be a temporary situation. Brent crude above USD 110.00 a barrel is not good news for regional markets. European equities never passed go yesterday and headed directly south. That state of affairs is likely to persist today and even the buy-the-dip gnomes of New York will struggle to construct a bullish case later this evening.

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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