Asian stocks climb as Beijing reopens

Asian markets rise as China eases restrictions

Friday’s higher-than-expected U.S. nonfarm payrolls saw Wall Street pull back sharply as hopes of an easier Fed hike on a slowing economy were dashed, although I’d say a slowdown in the nor would the US economy be good for stocks. The S&P 500 ended down 1.63%, the Nasdaq fell 2.47% and the Dow Jones fell 1.06%.

In Asia, an easing of restrictions in Beijing, along with reiterations of accommodative monetary policy in Japan, shielded Asia from back-and-forth volatility from New York, boosting sentiment on US futures and North Asian markets. US futures rebounded, with Nasdaq futures up 0.70%, S&P 500 futures up 0.50% and Dow futures added 0, 40%.

Japan’s Nikkei 225 rose 0.60%, unraveling a rocky start. South Korea is closed today, but mainland China’s Shanghai Composite jumped 1.05%, with the CSI 300 jumping 1.50% higher. Hong Kong’s Hang Seng rose 1.10% and it looks like the reopening news and its positive outlook are outweighing any historical Chinese data like PMIs for now.

The picture is more mixed in the rest of Asia, perhaps thanks to higher oil prices and a soggy close in New York. Singapore is down 0.15%, having reversed most of its earlier losses. Taipei was up 0.55%, while Jakarta fell 1.50%, led by resources after the government announced it was investigating possible palm oil distribution cartels. Malaysia closed today, while Bangkok is down just 0.25% and Manila is down 0.55%. Australian markets were also unable to shake off Wall Street’s weak close on Friday ahead of an expected RBA rate hike tomorrow. The All Ordinaries are down 0.25%, with the ASX 200 down 0.55%.

With most of Europe in lockdown today, most eyes will be on UK markets, which will reopen after a four-day break. Rising oil prices over the past two days are expected to bring cost of living concerns back to the fore, which could weigh on sentiment. A potential change in leadership in the UK, regardless of your political views, will be another source of uncertainty.

This article is for general information purposes only. It is not investment advice or a solution for buying or selling securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for everyone. You could lose all your deposited funds.

With over 30 years of experience in the foreign exchange market – from spot/margin trading and NDFs to currency options and futures – Jeffrey Halley is OANDA’s Senior Market Analyst for Asia -Pacific, responsible for providing timely and relevant macroeconomic analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia, as well as prominent print publications including the New York Times and The Wall. Street newspaper, among others. He was born in New Zealand and holds an MBA from Cass Business School.

Jeffrey Halley
Jeffrey Halley

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