Asian equities ignore US futures reversal

Asia follows Wall Street’s drop

Wall Street fell during the main session overnight, as Walmart’s result and soft US confidence and housing data heightened recessionary fears and dampened sentiment. The S&P 500 finished 1.15% lower, the Nasdaq tumbled 1.87% lower, with the Dow Jones losing 0.74%. In Asia, the picture has been sharply reversed after both Alphabet and Microsoft gave upbeat future assessments, despite both slightly missing earnings forecasts. US index futures are sharply higher as a result. S&P futures are 0.78% higher, Nasdaq futures have jumped 1.56% higher, and Dow futures have gained 0.30%.

Asian markets are painting a different picture, mostly trading to the negative side, continuing a pattern of following the Wall Street main session price action, with continuing question markets over China risks. With the FOMC to come tonight, Asian markets also appear to be taking some risk off the table into the week’s main event.

Japan’s Nikkei 225 is just 0.15% higher, but South Korea’s Kospi has fallen by 0.55%. In China, markets are finding no solace from the China property fund or Ali Baba’s intention to create a Hong Kong main board listing, allowing retail investors to access its stock from Shenzhen and Shanghai. The Shanghai Composite is down by 0.28%, with the CSI 300 falling by 0.58%, while Hong Kong has slumped by 1.40%.

Singapore is 0.25% lower in regional markets, and Taipei has lost 0.55%. Kuala Lumpur is just 0.12% higher, while Jakarta and Bangkok are roughly unchanged, and Manila has lost 0.45%. Australian markets have not responded to inflation rising by less than anticipated today, the ASX 200 is 0.10% lower, and the All Ordinaries have eased by 0.15%.

European markets had another soft session overnight, dogged by slumping Russian natural gas exports to the Eurozone. That reality is set to continue hamstringing European equities, and ahead of the US FOMC this evening, European markets look set to continue trading from the soft side.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was 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 and Channel News Asia as well as in leading print publications such as 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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