Asian equities are slightly lower as US futures retreat
Asian markets started brightly, following on from a robust overnight session on Wall Street. The S&P 500 rose 0.71%, the Nasdaq jumped 0.95%, and the Dow Jones climbed 0.56%. The rally being broad-based after the NYSE reversal lifted US-listed Chinese companies, and the OPEC+ production cut turbo-charging the energy sector.
US index futures have abruptly changed course in Asia though, unwinding most of those gains as the Georgia election results came in. As expected, the election has been extremely close and we may have to wait until late in the week for an official announcement. A Republican victory is seemingly deflating further fiscal stimulus hopes. The S&P 500 e-minis are down 0.56%, the Nasdaq 100 futures have slumped 1.15%, and the Dow Jones futures have retreated by 0.27%.
Asian equities have followed US futures lower, but more cautiously, after starting brightly. The Nikkei 225 has fallen 0.35%, while the Kospi is now just 0.10% higher. In China, the Shanghai Composite and CSI 300 are down 0.20%. Hong Kong has fallen 0.90% after the US government banned eight China payment apps overnight, adding to the election gloom.
Regionally, Singapore is down 0.20%, with Jakarta falling 0.60% and Kuala Lumpur falling 0.80%. Vietnam is the day’s outperformer, as international investor flows have today sent the Hanoi Index 1.95% higher, and the Ho Chi Minh Index 1.20% higher. Vietnam is a clear investor pick as a winner in the Asian recovery, both as a recipient of previously China-bound investment flows and as a cyclical play.
Australian markets have taken fright on the fall of the US index futures and rapidly fading hopes of more US fiscal stimulus. The ASX 200 has dropped 1.40%, with the All Ordinaries slumping by 1.25%.
The Georgia election’s permutations are undermining sentiment, and those election results seem to be getting closer by the minute. A drawn-out to-close-to-call count, or a recount, may weigh on equities until we have more clarity.