Asian markets higher after Wall Street gains
Asian equity markets were mostly higher today after the S&P 500 and NASDAQ closed at record highs last night. The exception is China markets, where the PBOC withdrawing liquidity and nuclear nerves have pushed Shanghai Composite and Hong Kong markets lower on Tuesday.
Overnight, the S&P 500 rose 0.18%, the NASDAQ jumped 0.74%, with the Dow Jones falling 0.25% as the rotation trade falls out of favor pre-FOMC. Futures on all three indexes rose in Asia by around 0.10%, underpinning sentiment locally.
The Nikkei 225 jumped by 1.0 % today, although the KOSPI rose by only 0.17%. Speculation that the BoJ will announce an extension to their pandemic support measures until September at Friday’s policy meeting seemed to support sentiment. However, China markets were under pressure, with the Shanghai Composite down 1.0% while the CSI 300 fell by 1.30%, with Hong Kong lower by 0.90%.
China and Hong Kong equity markets were under pressure in the Asian morning, even as the rest of Asia was following Wall Street higher. Two factors appeared to be at play here. Firstly, the PBOC drained a net CNY 10 bio via the repos after the long weekend.
Secondly, every major news outlet is running a story about potential problems with a French-designed nuclear power plant located in Taishan, located west of the Pearl River Delta and just 140 km from Hong Kong. There have been reports of a leak at the plant, and the Biden administration has been in contact with French and Chinese officials about the issue.
Elsewhere, Singapore rose 0.83%, with Taipei up 0.60%, with Jakarta and Kuala Lumpur unchanged. Australian markets were also tracking higher, the ASX 200 climbing 1.120% and the All Ordinaries rising by 0.70%.
European and UK equities markets will likely open firmer, following the New York and Asia lead, with China’s travails regarded as a local issue for now.