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Asia equities in gentle retreat

Asia equities in gentle retreat - MarketPulseMarketPulse

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US stocks recover, Asia shows caution

After a frantic sell-off, US equities made an impressive comeback as the emergence of the US stimulus bill and government funding bills proved just too juicy a morsel for the dip-buying FOMO herd to ignore. By the end of the session, US equities had recovered most of their losses.

The S&P 500 finished the day 0.39% lower, the Nasdaq fell just 0.10%, and the Dow Jones finished in positive territory. The Dow rose 0.12%, boosted by US banks being allowed to restart dividends and share buybacks.

In Asia, the volatility seen overnight has prompted regional investors to lighten risk into the holiday period, with most equity markets lower in an orderly fashion today. The Nikkei 225 has fallen 0.80%, with the Kospi down 0.55%. Mainland China’s Shanghai Composite and CSI 300 continue to defy the noise elsewhere, both up 0.10%, with Hong Kong easing by just 0.15%.

Singapore has fallen 0.25%, with Kuala Lumpur down 1.0% and Taipei 0.25% lower. Jakarta has declined 0.85% ahead of a presidential cabinet reschedule being announced today. Australian stocks have also retreated as commodities fell overnight in the general rout. The ASX 200 has declined 1.25%, with the All Ordinaries 1.20% lower.

The beleaguered UK and European stock markets saw prices slide as many EU members have banned arrivals from the UK. However, these markets may receive a boost this afternoon as Britain offered a fishing fig leaf in Brexit trade negotiations. It is unlikely to be enough to materially impact yesterday’s ugly session, with Brexit fears, border closures and Covid-19 concerns sure to continue weighing on sentiment.

US markets will probably be lifted by Apple’s electric car news, as reported by Reuters. However, with the holiday season upon us, with the ensuing drop in institutional liquidity, the session is likely to be dominated by investors reducing risk exposure as well.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is 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, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.

Jeffrey Halley

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