Asian equities move higher

China equities rise on Suez opening

Wall Street had a mixed session overnight with rising US yields weighing on the S&P 500 and Nasdaq, while the Dow Jones was firm ahead of the Biden infrastructure package tomorrow. With rotation in play, the S&P 500 finished lower by just 0.08%, with the Nasdaq retreating by 0.60%, while the Dow Jones closed at new record highs, climbing 0.32%.

In Asia, stocks are moving sideways to slightly higher except for China markets, after Wall Street’s inconclusive finish. The Nikkei 225 is just 0.11% higher, weighed down by banking stocks. However, the Kospi is up 1.10% following China markets, after the Suez Canal reopened yesterday.

China markets have also received a Suez Canal boost, helped along by ByteDance’s latest USD250 billion valuation in its latest private fundraising boosting technology. FTSE Russell’s impending inclusion of China sovereign bonds in its global government bond index also lifting sentiment. The Shanghai Composite has climbed 0.60%, with the CSI 300 jumping 1.25% and the Hang Seng rallying 1.20% higher.

ASEAN markets are more sedate and mixed. Singapore is up 0.75% as it continues to be a cyclical rotation darling, but Kuala Lumpur has retreated by 0.30%. Bangkok has risen 0.40%, while the Philippine’s inflation and Covid-19 concerns see the PSEi fall 0.70%. Jakarta fell 1.20% after a major oil refinery fire yesterday raised fears of higher prices and supply disruptions.

Australian markets are also in retreat as the number of Covid-19 community cases increased in Brisbane, which is in a three-day lockdown. The ASX 200 has fallen 0.50%, while the All Ordinaries is 0.63% lower.

If the overnight US session was exemplified by cyclical rotation ahead of President Biden’s announcement tomorrow and rising US yields, Asia’s winners are those with a direct correlation to the reopening of the Suez Canal, it seems. The outperformance by North Asia should be enough to lift European shares modestly at the open. Still, markets looked set to range in a choppy fashion ahead of the Biden presentation and a heavy data calendar starting from tomorrow.

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