Asian equity markets are mixed

Asian markets higher after Wall Street gains

Asian equity markets are mostly higher today after the S&P 500 and Nasdaq closed at record highs last night. The exception is China markets, where the PBOC withdrawing liquidity and nuclear nerves have pushed mainland and Hong Kong markets lower on Tuesday.

Overnight, the S&P 500 rose 0.18%, the Nasdaq jumped 0.74%, with the Dow Jones falling 0.25% as the rotation trade falls out of favour pre-FOMC. Futures on all three indexes have risen in Asia by around 0.10%, underpinning sentiment locally.

The Nikkei 225 has jumped by 1.0 % today, although the Kospi has risen by only 0.17%. Speculation that the BoJ will announce an extension to their pandemic support measures until September at Friday’s policy meeting seems to be supporting sentiment. However, China markets are under pressure, with the Shanghai Composite down 1.0% while the CSI 300 has fallen by 1.30%, with Hong Kong lower by 0.90%.

China and Hong Kong equity markets are under pressure this morning, even as the rest of Asia is following Wall Street higher. Two factors appear to be at play here. Firstly, the PBOC drained a net CNY 10 bio via the repos after the long weekend. Secondly, every major news outlet is running a story about potential problems with a French-designed nuclear power plant located in Taishan, located west of the Pearl River Delta and just 140 km from Hong Kong. There have been reports of a leak at the plant, and the Biden administration has been in contact with French and Chinese officials about the issue.

Elsewhere, Singapore has risen 0.83%, with Taipei up 0.60%, with Jakarta and Kuala Lumpur unchanged. Australian markets are also tracking higher, the ASX 200 climbing 1.120% and the All Ordinaries rising by 0.70%.

European and UK equities markets will likely open firmer, following the New York and Asia lead, with China’s travails regarded as a local issue for now.

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