A mixed day for Asian stock markets

Evergrande weighing on Japan and Hong Kong markets

US markets started the quarter strongly on Friday, boosted by positive results from a trial of Merck’s oral Covid-19 treatment, a postponement of the US debt ceiling deadline and start-of-month inflows. The S&P 500 rallied by 1.15%, the Nasdaq rose by 0.82% and the Dow Jones jumped by 1.44%, although the buy-the-dippers couldn’t prevent a negative weekly performance overall. Futures on all three have given back some of those gains this morning, Nasdaq futures retreating by 0.40%, while Dow and S&P futures are 0.25% lower.

That sees a mixed performance in Asia, complicated by the news that Evergrande’s stock has been suspended in Hong Kong, with a USD 260 million note due for repayment today. In Japan, the Nikkei 225 has fallen by 1.10% ahead of a parliamentary vote also, to confirm the appointment of the new Prime Minister. South Korea and mainland China are closed.

Hong Kong has sunk by 2.55% on Evergrande nerves while Taipei is down by 0.60%. Singapore is rallying strongly though, rising by 1.25% today as news circulates about the government talking to other governments about vaccinated travel. Kuala Lumpur is flat with Bangkok 0.75% higher, Jakarta leaping 1.40% higher, and Manila rising 0.30%. With the cyclical legacy-industry-orientated Dow Jones outperforming Friday, it appears that similarly structured ASEAN markets are following suit.

Australian markets are also rallying strongly today, with iron ore futures rising 5.0% in Asia, and natural gas futures rising by 3.60%. However, it is banks leading the charge on an oversubscribed CBA buyback as holiday-thinned markets follow New York’s lead. The ASX 200 and All Ordinaries have climbed by 0.80%.

European markets have an equally thin data calendar ahead of them today, and watching the outperformance of the Dow Jones and ASEAN and Australian markets, are likely to open higher this afternoon after finishing lower on Friday. Much will depend on the outcome of the OPEC+ meeting this afternoon. If OPEC+ remains unmoved, northern hemisphere energy woes will reassert themselves, which could undo any initial moves higher.

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