HomeContributorsFundamental AnalysisAsian Indices Track Recent Gains In The US

Asian Indices Track Recent Gains In The US

General Trend:

  • Shanghai Composite rises over 1% in early trading, Financials outperform
  • Financial, pharma and tech companies trade higher in HK
  • Pharma index rises over 2% in Japan, Takeda gains over 3% on the news related to the development of a coronavirus therapy
  • Sectors gaining in Australia include Telecom Services and Consumer Discretionary, Resources sector lags amid ex-dividends for BHP and Rio Tinto
  • Australia said it would implement an arrival ban related to South Korea, enhance screening measures related to Italy

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened +0.4%
  • (AU) Australia Treasury Sec Kennedy: Q1 GDP to be negatively impacted from Coronavirus by 0.5%, bushfires to cut 0.2% from GDP in Q4
  • (AU) Australia Fin Min Cormann: Reiterate stimulus will be announced very soon
  • MYR.AU Reports H1 (A$) Net 41.5M v 41.3M y/y; EBITDA 113.1M v 113.6M y/y; Rev 1.61B v 1.67B y/y
  • (AU) Australia Treasury: not forecasting a recession for Australia as of yet

Japan

  • Nikkei 225 opened +1.4%
  • (JP) Analyst expects Japan Government Pension Fund (GPIF) to increase its weighting in foreign bonds – Nikkei
  • (JP) Japan Investors Net Buying of Foreign Bonds: -ÂĄ489.7B v +ÂĄ656.3B prior week; Foreign Net Buying ofJapan Stocks: -ÂĄ745.0B v -ÂĄ68.1B prior week
  • (JP) Japan Securities Dealers Association (JSDA) is considering easing the voluntary regulations related to investments in unlisted shares – Nikkei
  • TM To restart normal operations at Japanese plants from March 9th – Nikkei
  • 7751.JP CEO Mitarai: Will stop relationship with HP if purchased by Xerox – Nikkei
  • (JP) Japan Chief Cabinet Sec Suga: We are able to control speed of coronavirus spread in Japan at this stage
  • (JP) Japan MoF sells ÂĄ700B v ÂĄ700B indicated in 0.40% (prior 0.50%) 30-yr JGBs, avg yield: 0.335% v 0.529% prior, bid to cover 3.65x v 4.65x prior
  • (JP) Bank of Japan (BOJ) Gov Kuroda: Coronavirus impacts economy via various routes, effects already seen from decline in tourists from China – speaking at Diet (yesterday)

Korea

  • Kospi opened +0.9%
  • (KR) South Korea Jan Current Account: $1.0B v $4.3B prior (smallest surplus since April 2019); Balance of Goods (BOP): $1.9B v $5.0B prior
  • (KR) South Korea Coronavirus Update: 145 additional cases v 293 prior; Total cases at 5,766 v 5,621 prior
  • (KR) Bank of Korea (BOK) Gov Lee statement after Emergency Meeting: Will consider and take measures to stabilize the markets and support the economy as needed; Will increase ceiling for special loan facility by KRW5.0T (yesterday)

China/Hong Kong

  • Hang Seng opened +0.5%; Shanghai Composite opened +0.8%
  • (CN) China National Health Commission Coronavirus Update for March 4th: 149 additional cases v 119 prior; Additional deaths 31 v 38 prior; Hubei: 134 additional cases v 115 prior; additional deaths 31 v 37 prior
  • (CN) China PBoC reiterates stance to maintain its prudent monetary policy with flexibility; to keep liquidity more ample; property will not be used as means of short-term stimulus to jumpstart the economy (overnight)
  • (CN) China PBOC to work with other regulators in supervising major financial infrastructure
  • (CN) China Ministry of Industry and Information Technology (MIIT): ~45% of China’s small and medium-sized enterprises (SMEs) had resumed work as of Monday v ~33% Feb 26th – Xinhua
  • (CN) China Securities Times: No need for the PBOC to closely follow Fed rate cut move
  • (CN) China PBOC sets Yuan Reference Rate: 6.9403 v 6.9514 prior
  • (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 13th consecutive session, Net CNY0B v CNY0B prior
  • (CN) China Passenger Car Association (CPCA) sees 2020 passenger vehicle sales at 21M, higher y/y – Xinhua
  • (CN) China has resumed 83.4% of its coal production capacity v 58% Feb 11th – Xinhua

Other

  • OPEC sources: Saudis proposes OPEC+ cuts production by 1.2M bpd but Russia opposes plan; Russia wants group to hold off on new cuts through Q2 – press
  • (PH) Philippines Feb CPI Y/Y: 2.6% v 3.0%e; CPI Core y/y: 3.2% v 3.3% prior

North America

  • (CN) US Sen Grassley (R-IA): China needs some leeway on Phase 1 trade deal, see no evidence China intends to escape from agreement to increase purchases of US products – US financial press
  • (US) President Trump: We are getting along very well with China, China President Xi is working hard, virus numbers in China re getting better
  • (US) Fed’s Bullard (dove, non-voter): virus situation is fluid; Fed has plenty of flexibility; global economy likely to take hit in H1 – Q&A with reporters
  • (US) California declares state of emergency due to coronavirus
  • (US) FEDERAL RESERVE BEIGE BOOK: SIGNS OF CORONAVIRUS ARE NEGATIVELY IMPACTING TRAVEL AND TOURISM STARTING TO EMERGE
  • (CA) BANK OF CANADA (BOC) CUTS INTEREST RATES BY 50BPS TO 1.25%; MORE-THAN-EXPECTED; SEES COVID-19 VIRUS AS ‘MATERIAL NEGATIVE SHOCK’ TO CANADIAN AND GLOBAL OUTLOOKS

Europe

  • (UK) EU Trade Commissioner Hogan’s office: trade talks with UK are off to a good start

Levels as of 12:15ET

  • Hang Seng +1.4%; Shanghai Composite +2.0%; Kospi +1.0%; Nikkei225 +1.1%; ASX 200 +1.1%
  • Equity Futures: S&P500 -0.6%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.6%
  • EUR 1.1144-1.1130; JPY 107.73-107.27; AUD 0.6630-0.6607; NZD 0.6304-0.6280
  • Commodity Futures: Gold -0.2% at $1,640/oz; Crude Oil +1.2% at $47.36/brl; Copper +0.4% at $2.59/lb
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