A mixed day for Asian equities

Wall Street retreats, Asia mixed

The post-FOMC “inflation expectations are now anchored” rally has petered out. Technology, or growth, took a bath overnight as the Nasdaq plummeted by 2.47%, while the S&P 500 fell 0.87%, with the “value-heavy” Dow Jones easing just 0.09%. In Asia, futures on all three indexes continue to ease, shedding around 0.30%. With multiple expires on equity instruments occurring this evening in the US, some distortion because of that could be in play, as could end of yearbook squaring, etc. I expect the choppy price action to continue to spoof fast-money players into the year-end, both in the US and elsewhere.

The Wall Street tech retreat overnight has had a similar effect on Asian markets with similar weightings, with the US addition of another swath of Chinese companies to their entity lists also weighing on sentiment. The Nikkei 225 is 1.55% lower, with markets completely ignoring the Bank of Japan. The BoJ left its policy rates and its 10-year JGB yield target of 0.0% unchanged. It has announced it will scale back its pandemic bond and commercial buying programmes in 2022 while extending the SME relief programme. USD/JPY was unchanged after the BoJ meeting which was unsurprising given that the US/Japan yield differential is its key driver.

South Korea’s Kospi has eased by 0.25%. Mainland China is also lower, the Shanghai Composite falling by 0.95%, and the CSI 300 has retreated by 0.70%. Meanwhile, the Hang Seng is 1.25% in the red. Regionally, Singapore has eased 0.30% lower while Kuala Lumpur has climbed 0.30%. Jakarta has retreated 0.40%, with Taipei easing just 0.15%. Bangkok and Manila have fallen by 0.40%. Australia is bucking the trend with local markets rising. The All Ordinaries has risen 0.25%, while the ASX has rallied by 0.35%.

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