Asian stock markets rally on China’s soothing words
US stock markets had a mixed result yesterday, with the FOMC statement being largely discounted. However, Asia markets are off to a lively start after China officials called a meeting with bankers and assured them that the recent clampdowns were targeted and not part of a broader strategy. Temporary abating of China risk has been enough to greenlight a broad rally across the region.
The S&P 500 was unchanged yesterday, while the NASDAQ rose by 0.70%, while the Dow Jones fell by 0.37%. That price action continues in Asia with NASDAQ futures flat, but S&P and Dow futures easing. In Asia, the Nikkei 225 has climbed by 0.65%, with the KOSPI rising 0.30%. China markets welcomed the governmental words yesterday and, after a few torrid sessions, are all higher now. The Shanghai Composite has rallied 1.25%, with the CSI 300 jumping by 1.45% and Hong Kong, heavy with China-tech, leaping 2.40% higher.
Regionally, Singapore has risen 0.60% as the MAS greenlights a resumption of full bank dividends. The outlook is bright for the banking sector, which many consider a somewhat boring industry. The major banks in Singapore are well capitalised, the city-state is well run and the vaccination rollout is moving at breakneck speed.
Kuala Lumpur is 0.30% higher, while Taipei has risen 0.70%. Jakarta is flat while Bangkok bucks the trend, falling 0.60% after returning from holiday. Australia is also higher, with the ASX 200 and All Ordinaries rising by 0.40%.
The upbeat mood in Asia, and some relief that the China clampdown may be done, for now, should be enough to lift European markets at the open. The US releases Advance GDP and Core PCE, with both expected to show massive gains. Unless Amazon (NASDAQ:AMZN) disappoints, it is hard to see the US data derailing the rally on Wall Street either, now that the FOMC is out of the way.