Asian equities ignore New York to price in weekend risk

Asian equities are having a mixed day once again, despite another sharp rally in New York overnight. The reasoning behind the rally in New York is tenuous, most especially, the EU declining to sanction Russian energy imports. A story circulating that Apple was working on hardware rental, instead of purchase, lifted technology stocks and their suppliers Asia today. That, along with firm US data, and hope of another globally coordinated SPR release led by the IEA, was enough of an excuse for the FOMO fast-money gang to pile back into stocks.


The S&P 500 finished 1.43% higher, the Nasdaq rallied by an impressive 1.94%, and the Dow Jones rose by 1.00%. In Asia, price action is muted and US futures on all three indexes are hovering around the unchanged mark.


Asian markets are once again mixed, completely refusing to follow a tail-chasing New York market. Weekend event risk is rightly sapping the animal spirits of the equity market in Asia. A firmer Japanese yen, jaw-boned higher by the Ministry of Finance (MOF) and BOJ, reversed early Nikkei 225 gains, pushing it 0.15% into negative territory, while South Korea’s Kospi is unchanged, and Taipei is 0.25% lower.


China markets are also trading heavily as US authorities said that delisting risks for US-listed China stocks was still a live issue. Covid-19 and weekend event risk are also weighing on sentiment. That sees the Shanghai Composite falling 0.50%, with the CSI 300 retreating by 1.0%, and the fast-money-dominated Hang Seng tumbling by 1.60%, led by China tech heavyweights.


ASEAN markets are, by contrast, mostly in the green. It appears that investors are more confutable carrying exposure there into the weekend. Singapore has climbed 0.55% higher, boosted still by loosening pandemic restrictions, Kuala Lumpur is unchanged, with Jakarta easing by 0.60%, Bangkok is 0.10% higher, while Manila is down just 0.20%. Australian markets are finishing the week on a positive note, the ASX 300 rising 0.25%, and the All Ordinaries climbing 0.35%.


A muted Asian session will likely lead to an equally muted European session with investors unlikely to stomach heavy weekend risk. US yields rose once again overnight, and were once again, ignored by a New York market desperate to buy dips. The price action has been both optimistic and chaotic this week in the US, but I suspect another rise by yields this evening with the weekend approaching, may see a pause in the FOMO-ness.