Asia mixed after Wall Street gains ground

ADB and China nerves cause a mixed picture with Asian equities today

Wall Street’s rally continued overnight, boosted by the Netflix results apparently. In Asia, US futures are flirting with negative territory as Alphabet and Microsoft announce hiring assessments. Meanwhile, another China property developer is defaulting on offshore debt, Covid cases remain elevated in mainland China, and the Asian Development Bank has downgraded regional growth while raising inflation assessments once again. Taken in totality, Asian markets are very mixed today as China nerves temper the urge to follow Wall Street in several markets.

Overnight, the S&P 500 rise by 0.59%, while the tech-heavy Nasdaq outperformed, rallying by 1.58%. The Dow Jones managed just a 0.15% gain. In Asia, US futures have run out of steam, with S&P 500, Nasdaq and Dow futures easing by 0.10%.

In Asia, Japan’s Nikkei 225 is up just 0.23% after the BOJ left policy unchanged. Meanwhile, South Korea’s Kospi has eked out a 0.40% gain after the sharp rise once again by the Nasdaq overnight. China markets are in negative territory, with the Shanghai Composite and CSI 300 losing 0.45% and Hong Kong falling by 1.25%.

In regional markets, Singapore has fallen by 0.65%, but Taipei, also highly correlated to the Nasdaq, has managed to rise by 0.70%. Jakarta is lower by 0.85% ahead of the BI decision, while Kuala Lumpur has gained 0.65%. Bangkok is 0.30% lower, while Manila has risen by 0.75%. Australian markets are also mixed, the All Ordinaries have risen by just 0.05%, but the ASX 200 has fallen by 0.30%.

European markets ran out of steam yesterday, having coat-tailed Wall Street higher this week. A combination of Italian political instability, the resumption-or not- of gas flows through Nord Stream 1 today, and the ECB policy meeting, combined to bring a dose of reality back to European markets. I expect European markets to also struggle today with so many irons in the fire. Although if gas flows resume this morning, that may give European stocks an initial boost, even if the flows are slight.

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