Asian equities are subdued

Asian markets mixed

Asian markets are mostly lower this morning despite a positive US session. Growth stocks, led by technology, powered higher after the Powell speech at the expense of cyclicals in New York as US yields fell. The S&P 500 rose 0.42%, with the Nasdaq powering 1.03% higher. Meanwhile, the heavily cyclical Dow Jones could only manage a 0.17% gain. US futures are only marginally higher in Asia.

Given cyclicals underperformed overnight in New York, it is no surprise that ASEAN markets are mixed today; however, several other factors are also at work. The Nikkei 225 is up just 0.22%, with gains also muted by an impending expansion of Covid-19 restrictions, likely to be announced today. Meanwhile, the Kospi has fallen 0.15%

China markets are under pressure after the US added seven more mainland technology companies to its export black-list. The higher CPI and PPI prints are increasing PBOC tightening fears. The Shanghai Composite has fallen 0.95%, with the CSI 300 falling 0.50%. The sombre mood has spread to Hong Kong, with the Hang Seng falling 0.90%.

Singapore has fallen 0.15%, with Taiwan unchanged, Kuala Lumpur rising 0.30% and Jakarta climbing 0.50%. Bangkok is unchanged while Manila is closed for a holiday.

Australian markets are retreating, led by large banks despite resource companies outperforming. The Australian government announced age-related restrictions on the AstraZeneca vaccine overnight, adding to their vaccination programme woes as Europe and India withhold exports of the above. Additionally, markets were spooked by the RBA Financial Stability Review, which noted that the central bank was monitoring property prices closely. The ASX 200 is down 0.30%, with the All Ordinaries down 0.20%, although both have clawed back some of their earlier losses.

Wall Street is unlikely to be fazed by the Asia price action, which has been, admittedly, quite cautious all week. European equities will probably track Wall Street higher than Asia, benefitting from their newfound role as a recovery play and with lots of bad news seemingly baked into prices already.

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