Asian markets rise as China eases restrictions

Friday’s higher than expected US Non-Farm Payrolls saw Wall Street make an abrupt retreat as easier Fed hiking hopes on a slowing economy were dashed, although I’d argue a slowing US economy wouldn’t be good for equities either. The S&P 500 finished 1.63% lower, the Nasdaq tumbled by 2.47%, and the Dow Jones fell by 1.06%.

 Asian equities rise on Beijing reopening - MarketPulseMarketPulse

In Asia, an easing of restrictions in Beijing, along with reiterations of easy monetary policy in Japan has shielded Asia from New York’s back-and-forth volatility, lifting sentiment in US futures and North Asian markets. US futures have rebounded with Nasdaq futures rising 0.70%, S&P 500 futures are 0.50% higher, and Dow futures have added 0.40%.

Japan’s Nikkei 225 has risen by 0.60%, unwinding a rocky start. South Korea is closed today, but mainland China’s Shanghai Composite has jumped by 1.05%, with the CSI 300 leaping 1.50% higher. Hong Kong’s Hang Seng has rallied by 1.10% and it appears that reopening news and its positive outlook forward is outweighing any backwards-looking Chinese data like the PMIs for now.

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

With most of Europe closed today, most eyes will be on UK markets, which reopen after a four-day break. The rise in oil prices over the past two days is likely to make cost-of-living concerns front-and-centre again, potentially weighing on sentiment. A potential change of leadership in the UK, regardless of your political views, will be another source of uncertainty.

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