A mixed day for Asian equities

Powell weighs on Wall Street, Asia markets mixed

The Moderna CEOs’ concerns about vaccine efficacy and omicron torpedoed late closing Asian equity markets overnight, as well as European and US markets. A hawkish Jerome Powell darkening an already dark day for Wall Street. However, US index futures are strongly rallying this morning on what I assume to be a follow-through from comments out of Israel that booster shots would offer omicron protection. That has also lifted some Asian markets.

Overnight, the S&P 500 sank by 1.90%, with the Nasdaq falling by 1.55%, while the Dow Jones slumped by 1.84%. In Asia, US futures have jumped higher, led by Nasdaq futures which have leapt 1.10%, followed by a gain of 0.75% by the S&P futures and a rise of 0.45% by Dow Jones futures.

In Asia, the picture is mixed, with late closing markets yesterday outperforming earlier closing ones that missed the Moderna headlines and are playing catchup. Thankfully, the rise in US index futures is taking the edge of regional losses. The Nikkei 225 is 0.70% higher with the Kospi leaping 1.60% higher, coat-tailing the Nasdaq futures. In China, the Shanghai Composite and CSI 300 are flat after a softer Caixin PMI and nagging property sector debt repayment concerns. The Hang Seng is showing no such worries, rocketing 1.45% higher.

Regional markets are mixed today. Taipei is unchanged as Singapore rallies sharply, rising higher by 1.40%, but Kuala Lumpur has fallen by 0.80% and Jakarta by 1.15%, hampered by the overnight slump in oil prices. Bangkok is 1.40% lower with Manila falling 0.55%. Australian markets are also in the red but only modestly. The All Ordinaries has fallen by 0.55%, with the ASX 200 down just 0.35%.

The price action this morning highlights that omicron headlines continue to dominate intra-day market direction despite some major developments from Jerome Powell overnight. European markets are likely to follow North Asia higher for exactly the same reasons and in an environment of schizophrenic tail-chasing, the only winner this week will be volatility.

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