China slowdown weighs on Asian markets | Oanda

Craig Erlam and Jonny Hart talk China-COVID, oil and more - Oanda Market Insights Podcast

Asian equities ease once again on China worries

It was another rollercoaster session on Wall Street, with equities rallying powerfully as JP Morgan raised its income outlook and was upbeat on the US economy. The S&P 500 jumped by 1.86%, the Nasdaq rallied by 1.59%, while the Dow Jones leapt 2.0% higher. Snap’s downbeat forecast for this quarter saw its stock slump in aftermarket trading, dragging Meta with it. In what has become typical whip-saw price action these days, US index futures have slumped with investors having zero appetite for positioning moving against them. Nasdaq futures have slumped by 1.45%, S&P 500 futures are 0.85% lower, and Dow futures have fallen by 0.50%.

 

Asia has shown a reluctance to blindly follow New York of late, with China concerns being a more existential threat. The fall of US futures has been followed by JP Morgan and UBS sharply downgrading China growth, while Covid-19 cases remain stubbornly high by local standards in Beijing, prompting lockdown fears. That has seen Asian markets fall into the red today for the most part.

 

In Mainland China, the overnight stimulus measures were forgotten as the Shanghai Composite falls by 1.10%, with the CSI 300 losing 1.15%. In Hong Kong, the Hang Seng is 1.35% lower. Japan’s Nikkei 225 has eased by 0.65%, with South Korea’s Kospi losing 1.10%, and Taipei falling by 0.70%.

 

Singapore is just 0.15% higher, while Jakarta has jumped by 1.10% as markets price in no change in interest rates from BI later today. Kuala Lumpur is down 0.10%, while Bangkok has eased by 0.30% and Manila has retreated 1.0% lower. Australian markets are unchanged today.

 

European equities will likely open a bit softer this afternoon, in line with the price action in Asia. Their fate will be dictated on the day how firm, or not, the pan-Europe PMI data is. As for New York, that really depends on how much coffee the gnomes of Wall Street decide to consume before work, it’s that sort of market.

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.

Craig Erlam and Jonny Hart talk China-COVID, oil and more - Oanda Market Insights Podcast

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.