Robinhood restrictions irk investors
Robinhood dominated business news overnight as the online broker restricted trading in GameStop, AMC and other ‘viral’ stocks. The resulting price plunge had the media wailing that USD11 billion of value was wiped out in a single day; however, I would argue that there was never USD11 billion of value in the first place. The move was also fiercely criticized by small-time traders, and even politicians got involved in the financial fiasco. Congress member Alexandria Ocasio-Cortez, a Democrat, tweeted that the move was unacceptable, complaining that Robinhood’s decision blocked retail investors from purchasing stock while hedge funds were freely able to trade the stock.
Wall Street rebounded overnight after US GDP and Initial Jobless Claims sprung no surprises. The S&P 500 rose 0.97%, the Nasdaq climbed 0.50%, and the Dow Jones jumped 0.99% with investors happy to buy the previous days dip. Momentum has faded in Asia though, with the futures on all three indexes retreating, notably the Nasdaq futures, which have fallen 0.65%.
That has led to a mixed day in Asia after the region tracked higher in early trading. The Nikkei 225 is 0.25% lower, with the Kospi falling 0.80%. In China, a 98 billion Yuan injection vis the repos by the PBOC has alleviated funding squeeze fears. That has lifted the Shanghai Composite 0.15% higher, and the CSI 300 0.10% higher. The Hang Seng has rallied by 0.55%, with IPO fever and mainland investors notable.
Singapore has risen by 0.45%, while Kuala Lumpur and Taipei have fallen by 0.25%, with Jakarta falling 0.75%. Australia’s All Ordinaries is up 0.40%, with the ASX 200 rising by 0.25%.
The retreat by the US index futures in aftermarket trading, has raised doubts among Asian investors about the longevity of the main session rally overnight. That has led regional markets to adopt a more cautionary stance into the end of the week, leading to flow-driven mixed performances.
