Asian equities stage sedate rally

Asian markets edge higher to start week

The FOMO-gnomes of Wall Street needed no other encouragement after Jerome Powell’s Jackson Hole speech said what they wanted to hear, and didn’t say what they didn’t want to hear, rate hikes on the horizon. To be fair, Mr Powell could probably have said: “Hi, I’m Jerome Powell” and finished there, and Wall Street would have bought everything.

The major indices finished the week on a high note, with the S&P 500 rising 0.88%, the Nasdaq jumping by 1.20%, and the Down Jones climbing by 0.69%. In Asia, futures on all three are marginally higher by around 0.05%.

Asian markets have started the day positively as well, although my circumspectly than Wall Street. Nevertheless, the Nikkei 225 has climbed 0.40%, with the Kospi rising by 0.30%. China markets are mixed, with the Shanghai Composite rising 0.35% while the CSI 300 has fallen by 0.20%, with the Hang Seng edging 0.10% higher. Asian markets are still retaining Covid-19 nerves, and more importantly, China clampdown nerves, with each day delivering something new on that front.

ASEAN markets are being led higher by Singapore after the government announced the city-state had reached its 80% vaccination target over the weekend, spurring reopening hopes. The Straits Times has rallied by 0.90%, and investors’ return of risk appetite generally is boosting regional markets. Kuala Lumpur is 0.35% higher, with Bangkok jumping 1.10% and Taipei by 0.55%. In Australia, record results by the miner Fortescue have offset delta nerves in NSW and Victoria. The All Ordinaries has risen by 0.30%, with the ASX 200 0.20% higher. Falling numbers of Covid-19 cases in New Zealand today sees the NZX 50 rallying by 0.85%.

The biggest threat to the Asian rally this week will be poor PMI data from China. But the return of risk appetite internationally post-Jackson-Hole should be enough to keep the party going in Europe and the United States today. I expect European equities to open higher. UK markets are closed.

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