Asian equities follow Wall Street higher


Target outlook boosts equities

US markets seized on Target’s softened outlook to price in peak US inflation on a slow news day overnight, sending Wall Street sharply higher. The S&P 500 rose by 0.95%, the Nasdaq rallied by 0.94%, and the Dow Jones gained 0.80%. In Asia, US futures have dropped sharply. Nasdaq and S&P 500 futures have fallen by 0.45%, with Dow futures easing by 0.30%. The price action reinforces the theory that it is tail-chasing fast-money dominating moves on Wall Street this week.

Asia is ignoring the US futures’ moves today, as they often do, choosing to follow the overnight US main boards rally instead after a few very mixed sessions. The Nikkei 225 has risen by 0.85%, helped along by a weaker yen this morning. South Korea’s Kospi has added just 0.20%, perhaps held back by the downward Q1 GDP revision this morning.

In mainland China, markets appear to be suffering a bout of profit-taking after a strong performance this week. China’s Vice Commerce Minister said today that foreign trade faced huge pressures and uncertainty, which certainly won’t have helped sentiment. The Shanghai Composite is 0.70% lower, while the CSI 300 has lost 0.40%. Hong Kong is ignoring the mainland noise, however, remaining laser-focused on the overnight Wall Street gains as the Hang Seng rallies 1.65% higher today.

In regional markets, Taipei has rallied by 0.90%, with Singapore remaining a laggard, easing by 0.20%. Kuala Lumpur has added 0.20%, Jakarta has risen by 0.45%, Bangkok by 0.10%, and Manila by 0.30%. Australian markets have also posted modest gains after yesterday’s post-RBA selloff. The All Ordinaries has risen by 0.30%, with the ASX 200 edging 0.15% higher.

European markets gave back some of Monday’s gain overnight but will probably use the price action from late in New York and Asia today as an excuse to open slightly higher this afternoon.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell 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 all. You could lose all of your deposited funds.

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Jeffrey Halley

With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro 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 in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.