China weighs on Asian markets
It is a mixed day in Asia today as Wall Street limped into a cautious close on Friday. Jerome Powell’s comments on Friday that the time has come for a taper weighed on interest rate-sensitive technology stocks, already SNAP’ed earlier in the session. The S&P 500 closed down 0.11%, with the Nasdaq retreating by 0.82%, while the more cyclical Dow Jones rose by 0.21%. Futures on all three indexes have edged just 0.05% higher in Asia.
The Nasdaq performance is weighing on Tokyo with the Nikkei 225 slumping by 0.90% today, although the South Korean Kospi has moved 0.45% higher. In China, the rise in Covid-19 cases and the introduction of a property tax in parts of the mainland have offset Evergrande’s Friday coupon payment and bullish comments from the Chairman today. The Friday payment was made just before the buzzer and another payment is due this Friday. The Shanghai Composite is 0.38% higher, but the narrower Top 50 are down 0.32%. The CSI 300 and Hang Seng are unchanged, and it wouldn’t surprise if some ‘national team” “smoothing” was going on.
China concerns are limiting gains in regional markets with Singapore’s Straits Times down 0.05% with Taipei also unchanged. Kuala Lumpur is 0.15% higher as energy prices rise in Asia today, with Jakarta also edging 0.10% into the green. Bangkok has fallen 0.50% and Manila is down 0.75%. By contrast, the rise in energy and commodity prices, as well as a reopening in Melbourne on Friday, and a reopening of international borders in New South Wales are lifting sentiment down under. The ASX 200 is 0.30% higher, with the All Ordinaries up 0.40%.
The pre-market HSBC results are likely to dominate sentiment in early Europe. Facebook will be front and centre in investors’ minds today in both Europe and the US, and I expect a noisy range trading session ahead of the social network’s results.