Wall Street unwound an intra-day selloff late in the session, on what I suspect, were month-end flows, to finish modestly in the green on Friday. The S&P 500 rose 0.19%, with the Nasdaq climbing by 0.33%, while the Dow Jones finished 0.25% higher. In Asia, US index futures are around 0.20% higher, lifted by a strong start in Japan.
Japanese election boosts Nikkei
Asian equities are very mixed. A decent Jibun PMI and the comprehensive LDP win in yesterday’s election has seen the Nikkei 225 leap 2.35% higher. Hopes for the Japan recovery, and the election green-lighting another hefty fiscal package for Japan lifting equities there. South Korea has shrugged of mixed trade data to see the Kospi rise 0.55%.
The story in China is a completely different one. The PBOC this morning, started withdrawing the recent liquidity injections. Official PMIs fell over the weekend, although the Caixin Manufacturing PMI clung to positive territory. And with my China property developers, including an Evergrande unit due to make offshore coupon payment this week, China market sentiment is decidedly negative. The Shanghai Composite has fallen by 0.50%, with the CSI 300 edging 0.25% lower. In Hong Kong the selloff is more entrenched, the Hang Seng tumbling by 1.25%.
The mixed day continues in ASEAN where Singapore has risen by 0.85%, with Jakarta 0.20% higher and Bangkok unchanged as borders reopen today to international visitors. Meanwhile, Kuala Lumpur has tumbled by 2.10% after the government announced a one-off extra tax on large companies over the weekend. Australian markets have shaken on pre-RBA nerves, as US index futures climb in Asia and international borders reopen today. Strong ANZ jobs data has lifted sentiment further with the ASX 200 rising 0.70%, and the All Ordinaries rising by 0.35%.
Much of Europe is closed for a holiday today, but German and UK markets should be able to divorce themselves from China nerves to open slightly higher this afternoon. Further falls in European natural gas prices should also be a tailwind, especially for UK markets.
