Hawkish Fed comments leave Asian equity markets mixed
Equities were mixed in Asia after Vice-Chairman Clarida’s comments on tapering and rate hikes sent equities lower overnight on Wall Street. The S&P 500 fell 0.46% while the NASDAQ clung onto some gains, closing just 0.13% higher, while the Dow Jones fell by 0.92%. Sentiment was not assisted by the ADP Employment data, which rose by much lower than forecast, raising fears that tomorrow’s Non-Farm Payrolls will disappoint.
In Asia, futures on all three US indices have recovered slightly, rising by around 0.20%. That has lifted the Nikkei 225 by 0.50%, helped along by some strong earnings by local heavyweights, while Japan’s spiraling virus caseload is being ignored for now. The KOSPI, though, edged lower by 0.10%, while Taipei was unchanged.
In China, the Securities Times article admonishing online gaming sparked another sell-off in some equity markets, with fears that more government clampdowns on the tech sector are imminent. The article marked another salvo at the online gaming industry, citing teenage addiction and favorable tax treatment. This is the second government mouthpiece to take a shot at the online gaming sector this week, and investors who ignore this warning do so at their peril.
The Shanghai Composite was unchanged, but the more tech-heavy CSI 300 fell by 1.05%, while Hong Kong, somewhat surprisingly, was unchanged on the day.
Regionally, markets were toying with each side of unchanged, with Singapore down 0.10% while Kuala Lumpur was up 0.10%. Jakarta rose 0.45% ahead of GDP data later today, with Bangkok climbing 0.35% and Manilla also just 0.10% higher. Australian markets were much the same, with the ASX 200 and All Ordinaries also 0.10% higher.
The modest recovery by the US futures should be enough to generate a slightly positive start for European equities. However, as previously stated, equity markets look like they are settling in to wait for tomorrow’s US employment data.