Asia markets follows the leader

Asian equity markets dip

Asian equity markets are lower today as a thin data calendar and slow news ticker leave them content to produce another follow-the-leader session, coat-tailing the direction of overnight US markets. Robust US data overnight reinforced Fed hiking expectations which saw US equities fall once again. Although I note, that the recent rallies have been much larger in percentage terms than the falls have been, suggesting that bottom-fishing momentum is building as slowdown outlooks increase.

Overnight, the S&P 500 fell by 0.75%, the Nasdaq fell by 0.72%, and the Dow Jones eased by 0.54%. In Asia, US futures remain unchanged today, with the usual counter-trend move to the overnight session almost absent. The fall in oil prices in Asia today has limited the fallout in Asian markets though, with Japan’s Nikkei 225 recouping early losses to be down just 0.05%, although the Kospi has fallen by 0.95%.

Mainland China markets have also pared losses, the Shanghai Composite is down just 0.05%, while the CSI 300 is down just 0.15%. Local markets may also be finding support from the news that the central government has ordered state-owned banking heavyweights to set up a CNY 800 bio ($120 bio) line of credit for infrastructure projects according to Bloomberg. Hong Kong’s Hang Seng is down by 1.20% though, perhaps reacting negatively to a tightening of Covid-19 policies once again.

Across regional markets, Singapore has eased by 0.35%, with Taipei losing 0.50%, Kuala Lumpur falling 0.30%, and Jakarta remaining unchanged. Bangkok has lost 0.45%, with Manila retreating by 0.75%. Australian markets are in full retreat, the All Ordinaries and ASX 200 tumbling by 1.10%, with local markets continuing to mirror Wall Street’s price action.

European equity markets should open slightly lower this afternoon by today could be a big day for Eurozone markets, although activity will be diminished with UK markets closed today and tomorrow, and everybody stuck at an airport trying to go on holiday. Everything rests on the OPEC+ meeting today. If Russia is side-lined, I mean exempted from its production quotas, with other members stepping up, European markets could find themselves with a decent tailwind today. A business as usual outcome is likely to see a disappointing reaction.

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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