Asian equities follow Wall Street higher

Target outlook boosts equities

US markets seized on Target’s softened outlook to price in peak US inflation on a slow news day overnight, sending Wall Street sharply higher. The S&P 500 rose by 0.95%, the Nasdaq rallied by 0.94%, and the Dow Jones gained 0.80%. In Asia, US futures have dropped sharply. Nasdaq and S&P 500 futures have fallen by 0.45%, with Dow futures easing by 0.30%. The price action reinforces the theory that it is tail-chasing fast-money dominating moves on Wall Street this week.

Asia is ignoring the US futures’ moves today, as they often do, choosing to follow the overnight US main boards rally instead after a few very mixed sessions. The Nikkei 225 has risen by 0.85%, helped along by a weaker yen this morning. South Korea’s Kospi has added just 0.20%, perhaps held back by the downward Q1 GDP revision this morning.

In mainland China, markets appear to be suffering a bout of profit-taking after a strong performance this week. China’s Vice Commerce Minister said today that foreign trade faced huge pressures and uncertainty, which certainly won’t have helped sentiment. The Shanghai Composite is 0.70% lower, while the CSI 300 has lost 0.40%. Hong Kong is ignoring the mainland noise, however, remaining laser-focused on the overnight Wall Street gains as the Hang Seng rallies 1.65% higher today.

In regional markets, Taipei has rallied by 0.90%, with Singapore remaining a laggard, easing by 0.20%. Kuala Lumpur has added 0.20%, Jakarta has risen by 0.45%, Bangkok by 0.10%, and Manila by 0.30%. Australian markets have also posted modest gains after yesterday’s post-RBA selloff. The All Ordinaries has risen by 0.30%, with the ASX 200 edging 0.15% higher.

European markets gave back some of Monday’s gain overnight but will probably use the price action from late in New York and Asia today as an excuse to open slightly higher this afternoon.

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