Stock markets are mixed in Asia
Japanese stocks dip, China advances
Stock markets are mixed in Asia after Wall Street limped to a nearly unchanged finish despite Powell’s testimony stabilizing the ship. The S&P 500 ended up 0.12%, the Nasdaq closed down 0.22% and the Dow Jones edged up 0.13%. With little guidance from Wall Street, which now appears to be focused on future earnings, Asian markets have been left to fend for themselves.
The Nikkei 225 fell 0.88% as speculation grows that the Bank of Japan will lower its economic outlook at tomorrow’s policy meeting. Despite a slightly hawkish trend in the statement, the Bank of Korea kept rates at an all-time high of 0.50% this morning, pushing the Kospi up 0.45%.
In China, the strong, albeit unspectacular data dump today sees the Shanghai Composite rise by 0.20%, while the CSI 300 only increases by 0.10%. However, Hong Kong jumped 1.15% as Chinese tech giants talk about opening up their ecosystems to each other, which the markets say will appeal to their ultimate bosses in Beijing. Hong Kong is also expected to benefit from a rotation of IPOs in China from the United States in the future.
Taipei rose 0.45% today, while Singapore fell 0.40% after another rise in Covid-19 cases. Kuala Lumpur and Jakarta have, surprisingly enough, jumped 0.50% in what I’m guessing to be technical moves after previously tough sessions. I would approach the gatherings in each with a big grain of salt given the Covid-19 situations both are experiencing. Regional Asia had the most to lose from a change in tone from the Fed, and Powell’s overnight testimony likely drove the gains. Bangkok is up 0.20% while Manila is down 0.80%.
The impressive Australian employment data was not enough to keep markets in the green, as new cases of Covid-19 appear across Australia, raising fears of ever-growing lockdowns. The ASX 200 is down 0.30%, while the All Ordinaries is down 0.10%.
European stock exchanges should ignore Asia due to their vaccination premium. With the Fed still indifferent to inflation, that should be enough to push European equities up initially. Wall Street is unlikely to suffer significant declines this weekend either. Like I said before, respect the momentum.
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