Nasdaq slides, Asia in mixed mood
Overnight, a procession of poor US data delivered another kidney punch to US equities, with the tech-heavy Nasdaq bearing the brunt once again, as the more value-heavy Dow Jones remained steady. The S&P 500 fell by 0.80% as the Nasdaq slumped by 2.35%, while the Dow Jones managed a tiny 0.16% gain. In Asia, US index futures are seeing their usual counter-trend move. S&P 500 futures are 0.65% higher, Nasdaq futures have jumped by 0.95%, and Dow futures have gained 0.40%.
Asian markets are a mixed bag but appear to be focussing on the overnight moves on Wall Street being counterbalanced by mainland China equities rising modestly. The latter is a big surprise as Beijing Covid-19 cases climb and the port city of Tianjin nearby locks down its city centre. It wouldn’t surprise me if China’s “national team” was taking advantage of a relatively quiet day to buy.
Japan’s Nikkei 225 gave up some early gains and is now down by 0.10% for the day. South Korea’s Kospi though, has ignored the missile tests from North Korea to post a 0.85% gain. In a similar vein, the Nasdaq futures rally has lifted Taipei 1.05% higher.
Mainland China’s Shanghai Composite has risen by 0.60%, with the CSI 300 edging 0.15% higher. Hong Kong has climbed by 0.70%. Singapore though has fallen by 0.20%, with Kuala Lumpur rising by 0.20%. Jakarta has fallen by 0.45%, while Bangkok has climbed by 0.70%, with Manila adding 0.45%. Australian markets are also cheering the US futures rally, the ASX 200 rallying by 0.65%, and the All Ordinaries gaining 0.55%.
Asia’s mixed bag is unlikely to give European markets many clues. The underperformance by more value-orientated markets in Asia today may translate to early weakness, but I feel that the US refusal to rule out oil export restrictions will weigh more heavily. At the frontlines of the economic war with Russia, any sort of threat to Europe’s tenuous energy security, either by supplies or higher prices, won’t be good news for European equities. UK markets could be in for a frisky day as the No.10 “party gate” report comes out. I’m not sure whether BoJo going would be bullish or bearish for UK equities though.
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