Asian equities are flying

Asian equities jump on oil slide, Ukraine hopes

With oil prices crashing overnight, and tenuous hopes that a Ukraine resolution was on the table, equity markets saw a biblical stampede of bottom-fishers pouring into equity markets, sending them soaring. The S&P 500 leapt 2.57% higher, while the Nasdaq rocketed 3.59% higher, helped by an Amazon stock-split announcement. The Dow Jones, meanwhile, rallied a still-impressive 2.0%. In Asia, US futures are pausing for breath, perhaps on the latest UAE statements. Futures on all three indexes have eased by around 0.15%.

Asian markets are rapidly playing catch-up and rallying powerfully today, with retail-trader heavy bourses doing particularly well and displaying their usual herd-like behaviour. The Nikkei 225 has soared 4.0% higher, while South Korea’s Kospi has risen by 2.10%. In China, the fuel export ban story mentioned earlier has been ignored as exchanges enjoy a day in the sun. The Shanghai Composite has risen by 1.90%, with the CSI 300 jumping 2.30% higher. Hong Kong has risen by 1.60%.

With oil prices creeping higher in Asia once again, the euphoria has been slightly tempered in regional markets, but they too, are rallying. Singapore is 1.35% higher, Taipei has jumped by 2.45%, with Kuala Lumpur just 1.10% higher and Jakarta unchanged for the day, possibly after raising the limit palm oil producers must sell to the domestic market. Bangkok has risen by 0.70% with Manila up 1.15%. The fall in resource prices overnight is also tempering gains in Australia where the All Ordinaries and ASX 200 are 1.10% higher.

With US futures trading sideways in Asia, European markets are unlikely to display the same bullish momentum this afternoon unless we get a breakthrough in the Ukraine-Russia talks in Turkey. A dovish ECB is already priced into markets I believe and if anything, if they are less dovish than expected, it could be a headwind.

Given the volatility seen this week, picking the direction of US markets has become a turkey shoot. Markets will swing on Ukraine and oil developments, and I hold that we are just one big negative headline from consigning yesterday’s recovery to history.

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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