Asian markets steady despite Wall Street decline

Asian equities resilient after Wall Street retreat

Wall Street retreated sharply overnight as the FOMO gnomes decided that weak consumer confidence numbers and forward expectation sub-indices were perhaps not good for stock prices after all. The S&P 500 fell by 2.01%, the Nasdaq slumped by 2.98%, while the Dow Jones slipped by 1.58%. In Asia, the usual dip-buyers have appeared, lifting Nasdaq futures by 0.50%, and S&P and Dow futures by 0.20%.

Asian markets are mostly steady today, except for the Nasdaq correlated, retail-dominated ones such as Japan, South Korea, and Australia. China’s shortening of hotel quarantine requirements to a week announced yesterday is proving a supportive factor in the region today, although I can’t imagine it will result in a sharp increase in inbound visitors. Overall, although Asian markets are fairly much flat to lower, the falls are nowhere near reflecting the scale of the retreat by Wall Street overnight.

Japan’s Nikkei 225 has fallen by 1.05%, with South Korea’s Kospi slumping by 1.77%, the latter perhaps complicated by Bank of Korea rate hike fears. Mainland China markets have retreated more modestly, with the Shanghai Composite and CSI 300 both 0.50% lower. Hong Kong’s Hang Seng, meanwhile, has fallen by 1.0%.

In regional markets, Singapore, Kuala Lumpur and Manila have edged 0.15% higher, with Jakarta unchanged. Taipei has fallen by 0.80%. Australian markets have coat-tailed Wall Street south, the All Ordinaries falling by 1.25%, while the ASX 200 has lost 1.05%.

European markets appear set for a soft opening this afternoon after the Wall Street tumble overnight, although a move sensible response from Asia may take the edge off the negativity. Scandinavian markets could outperform once again after Turkey’s President Erdogan dropped his objections to NATO membership for Sweden and Finland overnight. Higher than expected German inflation could increase hiking fears by the ECB and weigh on equities, but realistically, it will all come down to the comments this afternoon by Ms Lagarde and Mr Powell at the ECB summit.

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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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