NYSE reverses delisting move

NYSE announcement lifts China markets

The NYSE announcement this morning reversing its decision to delist three Chinese telcos has had an immediate impact in Asia. China markets have abruptly reversed out of negative territory and into the green. The Shanghai Composite is 0.10% higher, with Hong Kong now unchanged on the day. I do note that the initial rallies were greater in scope and have quickly started to fade.

Risk reduction ahead of Georgia’s Senate runoffs today dominated North American trading. The S&P 500 fell 1.48%, while the Nasdaq lost 1.47% and the Dow Jones retreated 1.27%. All three indices traced out bearish outside reversal day patterns.

Asia has followed the US example with markets modestly retreating across the region. The Nikkei 225 has fallen 0.20% with the Kospi just 0.05% higher. Singapore has declined 0.30%, with Kuala Lumpur falling 0.50%. A potential merger between Gojek and Tokopedia has lifted Jakarta by 0.30%, with Thailand the day’s outperformer, the SET rising 0.90% as the government eased some Covid-19 restrictions.

Australian markets have tracked slightly lower as investors Downunder await the Georgia elections tomorrow, Asian time. The ASX 200 has fall 0.40%, with the All Ordinaries falling 0.20%.

It is notable that the sharp rally in Chinese markets after the NYSE announcement has very quickly faded. That suggests that potential concerns over the Georgia elections today remain topmost in investors minds. I expect European equities to open lower with that in mind, with UK markets under greater than average pressure due to the imposition of a new national lockdown. With positioning so heavily weighted to the long side, equity markets could potentially correct much lower if the Georgia election results are delayed, inconclusive or if the Democrats sweep both seats.

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