Asian equities power higher

Asian equities rise, follow US lead

Lower for longer interest rates is the mantra of the day in Asia which has followed Wall Street’s Friday lead. New York had a positive session with the S&P 500 rising 0.67%, the Nasdaq increasing 0.60% and the Dow Jones climbing 0.56%.

Japan’s Nikkei 225 has quickly regained the losses suffered after Abe’s resignation on Friday, jumping by 1.97% this morning. The Nikkei is testing resistance at 23,350 this morning, with a daily close opening up further gains to 24,000 in the days to come. South Korea’s Kospi has been weighed down by negative data this morning but has still eked out a 0.15% gain.

In China, the Shanghai Composite is up 0.90% and is testing resistance at 3460.00 this morning, with a daily close above signalling further gains to 3600.00. The CSI 300 is 0.67% higher and testing resistance at 4900.00. The Hang Seng is 0.95% higher, having risen above its 200-day moving average for the first time since late June today.

Across regional Asia, Thailand is 0.80% higher, Singapore is 0.50% higher, and Jakarta is flat, as record Covid-19 cases weigh down sentiment. Malaysian markets are closed for a public holiday.

Australian markets are also underperforming as China officially opens its Australian wine dumping probe, and local markets fret about Australia/China relations. Nevertheless, both major indices have edged slightly higher. The ASX 200 and All Ordinaries have risen 0.10%.

Although a UK holiday today will slow activity, European equities should follow suit and resolve higher. With markets embracing the lower for longer rates scenario from the Federal Reserve, and indeed every major central bank in the world, the search for yield has been given yet another sugar boost.

On Tuesday, we’ll get the dump of PMI data worldwide, which should provide clues about the trajectory of the global recovery. I expect the data to show that South-East Asia and Europe will outperform in general, although modestly so. If Covid-19 continues its worrying comeback in Europe though, the going may be much harder for Europe in September.

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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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