China property nerves weigh on Asia

Asian equities mixed after a big night on Wall Street

The Dow Jones and S&P 500 closed at record highs overnight, with the Nasdaq pretty close to it. The huge order from Hertz lifted Tesla stock 12.60% higher into the USD 1 trillion club and Facebook’s earnings and outlook weren’t as gloomy as had been expected. Supply chain and privacy issues may impact Apple, Alphabet and Twitter tonight, but you wouldn’t bet against the first two anyway delivering impressive results. That left the S&P 500 0.47% higher overnight, with the Nasdaq jumping by 0.90% and the Dow Jones climbing 0.18% as tech-dominated proceedings. The music continues playing in Asia, with Nasdaq futures rallying by 0.43%, while S&P 500 minis have risen 0.25% and Dow futures are up 0.13%.

All of this was music to the ears of Japan and South Korean markets, which are showing a much higher correlation to Wall Street, rather than China of late. Strong polling results in Japan, and the SK Hynix results, and a temporary fuel price cut in South Korea are also lifting sentiment. The Nikkei 225 has leapt 1.80% higher, while the Kospi is up 0.65% today.

In China, property developer Modern Land missed a debt payment and that has seen property sector nerves return to China markets. That cloud is tempering optimism across ASEAN today as well. The Shanghai Composite is unchanged with the narrower top 50 down 0.50%. The CSI 300 is also unchanged while the Hang Seng has edged 0.35% lower. China’s national team will probably ensure China equity markets are relatively steady ahead of the central committee meeting, but market nerves will be on edge until Evergrande makes, or doesn’t make, another due payment on October 29th.

Singapore is down 0.25% along with Kuala Lumpur, while Bangkok is unchanged, and Manila is down 0.30%. Jakarta has edged 0.50% higher as coal and natural gas prices soared yesterday. Taipei has bucked the trend and moved 1.0% higher, riding the semiconductor wave. Australian markets are also struggling to shake off the China nerves, with the ASX 200 and All Ordinaries both struggling to a modest 0.10% gain.

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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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