Asian equities follow Wall Street lower
Asian equities markets are mostly lower today after Wall Street tumbled once again after US inflation data reinforced the Fed tightening path. Admittedly, it took Wall Street some time to come to that conclusion, but the day finished with the S&P 500 down 1.65%, the Nasdaq tumbling by 3.18%, and the Dow Jones losing 1.01%. In Asia, some bottom-fishing had pushed futures on all three a little higher initially, but they have since fallen by -0.20% for the session.
In Asia, markets are almost all in the red. The exception, once again, is mainland China where the Shanghai Composite has edged 0.25% high, while the CSI 300 is just 0.10% higher. Although there has been more noise around the room for more stimulus in China, I suspect that China’s “national team” is “smoothing” again. I suspect they were busy yesterday as well. Take the rally with a huge grain of salt. With Sunac missing a foreign currency bond payment, Hong Kong is probably a more realistic reflection of China’s actual performance today. The Hang Seng is down by 1.90%.
Elsewhere, Japan’s Nikkei 225 has dropped by 1.70%, with South Korea’s Kospi 1.05% lower, and Taipei slumping by 1.80%. Singapore is down 0.75%, with Kuala Lumpur up 0.05% with a BNM rate hike out of the way. Jakarta has tumbled by 2.10%, with Bangkok losing 1.0%, and Manila down 0.45%. Australian markets are also deeply in the red, the All Ordinaries retreating by 1.80%, and the ASX 200 falling by 1.80%.
With Ukraine gas pipeline disruptions, Putin sanctions on European energy companies, and the poor performance by the US and Asian markets today, we can reasonably assume that European equity markets will open lower. Once again, I must reiterate, that any threats to European gas flows from Russia are very negative for European equities.
US markets are a complete turkey shoot and at the mercy of swinging intra-day sentiment and Fed-speak hitting the wires. It wouldn’t surprise me if the rear guard buy-the-dippers managed to generate a dead-cat bounce. You can pick and choose your pricing inputs this week in deciding how equities have done what they have done, but I believe that the underlying reason is that the reality of global stagflation and wars is where all roads are leading to.
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