Asian equities gain ground

Asian stocks move higher

After a few days of adverse price action, the FOMO gnomes appear to have run out of patience on the sidelines, and Asian markets are broadly higher this morning. Another positive, albeit modest, session from Wall Street appears to have been enough to flush buyers of the sidelines today. Flows in regional equity markets may also be being distorted by month-end and quarter-end flows from institutional investors.

Overnight, Wall Street rose slightly with the S&P 500 finishing 0.03% higher, the Nasdaq 0.19% higher, and the Dow Jones 0.06% higher. The closes were new all-time highs for the Nasdaq and S&P 500. Futures on all three have climbed by around 0.10% in Asia, further boosting sentiment.

The Nikkei 225 is unchanged after disappointing data, but the Kospi has shrugged that off to rise by 0.40%. Slowing PMIs in China has been offset by the PBOC adding liquidity via the reverse repo once again and sees the Shanghai Composite and CSI 300 0.25% higher. Hong Kong has eased by 0.25%.

Singapore has powered higher by 0.95% today, led by banks and M&A activity, while Kuala Lumpur remains under pressure from Covid-19 and politics, falling 0.35%. Jakarta is 0.15% higher, with Taipei climbing by 0.75%. Telecoms and an asset sale by Telstra have led Australian markets higher today, after a few torrid sessions. Despite more Covid-19 cases and expanding restrictions across the country, the All Ordinaries has risen by 0.60%, and the ASX 200 by 0.50%. One suspects the month-end and quarter-end flows are definitely at work in Australia today.

Wall Street looks to have moved to the side-lines ahead of the month, and quarter-end flows and ahead of PMI and Employment data. Those same flows will be at work today in Europe, but I expect a modestly positive start after it shrugged off the virus blues yesterday. Given the high potential for whipsaw moves over the next couple of days, watching from the sidelines out of the noise could well be a wise strategy.

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