Asian Equity Indices Rise As Oil Prices Decline

Jan 07 20, 06:59 GMT

General Trend:

Shanghai Composite rises in early trading as Consumer Discretionary and Financial shares gain
Financials are among the gainers in Hong Kong
Health-care related companies trade generally higher in HK and Shanghai amid recently reported virus outbreak in Wuhan (China)
Geely rises over 1%, Dec vehicle sales +39% y/y
China Merchants Land rises over 9% in HK, guided its FY results to increase ‘substantially’
Securities and Electric Appliance companies are among the gainers in Japan
Consumer, Telecom and Financial shares are among the gainers in Australia
Analysts comment on the possible impact of Australian bushfires on economic growth

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.1%
(AU) Australia Dec ANZ Job Advertisements M/M: -6.7% v -1.8% prior
PNV.AU Updates: Dec was the company’s first A$2.0M month; Reports prelim H1 Rev A$8.6M v A$3.8M y/y
(AU) Australia Treasurer Frydenberg: 8,500 claims worth A$700M have been filed related to bushfires since Sept

Japan

Nikkei 225 opened +0.5%
(JP) Japan Fin Min Aso: Clear signs that global economy is slowing, solid domestic demand is supporting Japan’s economy
(JP) Japan Dec Final PMI Services: 49.4 v 50.6 prelim (fastest contraction in 3 years, lowest level since Sept 2016); PMI Composite: 48.6 v 49.8 prelim (3rd consecutive contraction, lowest reading since April 2014)
7965.JP Largest shareholder Great Fortune International Development may make an “important” proposal to management (+13%)
(JP) Japan Economy Min Nishimura: Reiterates speculative moves in financial markets not reflecting fundamentals are not desirable
(JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.1% 10-year JGBs: avg yield: -0.0050% v -0.042% prior, bid to cover 3.70x v 3.28x prior

Korea

Kospi opened +0.5%
(KR) South Korea Vice Fin Min Kim: No direct impact expected on South Korea crude oil imports due to situation in middle east; will closely monitor financial and the currency markets and will take bold measures to stabilize the markets if volatility rises
(KR) South Korea ambassador asks US President Trump to continue to show leadership on North Korea nuclear issue – Yonhap
(KR) South Korea President Moon: See clear signs job market is recovering – New years address

China/Hong Kong

Hang Seng opened +0.5%; Shanghai Composite opened +0.1%
(CN) China State Taxation Administration: Will make larger effort to further optimize the tax business environment, improve tax administration efficiency, and deepen international tax cooperation; 2019 tax and fee cuts totaled CNY2.0T, 2% of GDP and contributed 0.8% to GDP – Xinhua
(CN) China State Administration of Foreign Exchange (SAFE): China will “steadily and prudently” diversify its $3.1T foreign exchange reserve holdings; This suggests there could be a change to the way China manages its holdings; this is also the first time SAFE has called for “prudence” in diversifying China’s reserve assets – SCMP
(CN) China Banking and Insurance Regulatory Commission (CBIRC): Will promote the conversion of household savings into long term capital market fund – guidelines issued
(CN) China PBOC sets Yuan Reference Rate: 6.9690 v 6.9718 prior
(CN) China PBoC Open Market Operation (OMO): Skips reverse repos for the 11th consecutive session; Net drain CNY0B v drain CNY50B prior
(CN) China President Xi: China is confident of better development in 2020 – Xinhua
(CN) China Vice Agriculture Min: China will not increase annual grain import quotas to accommodate higher US farm purchases
(HK) Hong Kong Chief Exec Lam: Economic recession in 2020 is expected to be more severe with rising jobless rates, and some businesses are expected to shut down after the Lunar New Year; Will increase monitoring of pneumonia cases

Other

(US) Defense Sec Esper: US will follow the laws of armed conflict.
Following the comments from Esper, it was reported in the financial press that the US Pentagon contradicted Trump and said the US won’t strike cultural sites related to Iran.
On Monday (Jan 6th), White House aide Conway said Trump did not say he’s targeting cultural sites, but he was openly asking a question.
(IQ) Follow Up: US administration said to have started drafting sanctions on Iran (in line with comments); Treasury Department and White House would likely play a lead role if the sanctions are ultimately implemented – Washington Post
(SA) Saudi Arabia Vice Defense Min: Discussed cooperation with US Defense Sec Esper
(IR) Iran Supreme Leader Khamenei: Any attack must be direct and proportional attack on American interests, openly carried out by Iran security forces press citing National Security Council Meeting

North America

BA Details in memo plan to suspend 737 MAX production in mid-Jan; about 3,000 employees will be affected – press

Europe

(UK) Chancellor of the Exchequer Javid: March 11th will release budget; it will seize opportunities of Brexit, will unleash a decade of renewal; will make good on pledges to cut taxes

Levels as of 12:15ET

Hang Seng +0.5%; Shanghai Composite +0.4%; Kospi +1.0%; Nikkei225 +1.5%; ASX 200 +1.4%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.4%, Dax +0.4%; FTSE100 +0.4%
EUR 1.1198-1.1188; JPY 108.50-108.31; AUD 0.6944-0.6926; NZD 0.6680-0.6659
Commodity Futures: Gold -0.4% at $1,562/oz; Crude Oil -1.0% at $62.63/brl; Copper +0.3% at $2.79/lb