Asian Equites Tumble With Wall Street

The incipient recovery rally on Wall Street overnight ran into a brick wall of Fed speakers, notably Jerome Powell who was very hawkish. That sent Wall Street tumbling to a negative close as US yields shot higher, notably at the short end. The S&P 500 fell by 1.47%, the Nasdaq slumped by 2.07%, and the Dow Jones fell by 1.02% as concerns mount about whether the Fed will send the US into a hard or soft landing. US futures have continued south in Asia, the S&P 500, Nasdaq and Dow futures are around 0.45% lower.

That has spilt over into Asian markets, already nervous about a deeper slowdown in China. The Nikkei 225 has slumped by 2.0%, with South Korea’s Kospi falling by 1.15%, and Taipei losing 1.0%. Mainland China stocks are lower, but showing some resilience, making me think that China’s “national team” are doing some pre-weekend “smoothing. A lower Yuan may also be supporting exporters. The Shanghai Composite has fallen by 0.45%, while the CSI 300 is down just 0.25%. However, the Hang Seng has lost 1.0% as President Xi emphasised digital security in his speech yesterday.

Across regional markets, Singapore, Jakarta, and Manila are down just 0.20%, while Kuala Lumpur is unchanged, Bangkok has lost 0.55%. Again, weaker currencies may be supporting local markets. Australian markets have taken fright at the losses on Wall Street overnight, falling heavily. The ASX 200 and All Ordinaries have slumped by 1.50%.

The price action in Asia, combined with a low appetite for risk over the weekend, is likely to see European equities fall heavily at the open this afternoon. Political risks in France and Britain will e another headwind and fears of widening European energy sanctions on Russia will limit any gains.

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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