Wall Street higher but Asia mixed
Wall Street enjoyed a stimulus tail wind overnight, with the major indices closing at or near record highs. The S&P 500 rose 0.90%, and the NASDAQ and Dow Jones rose 0.70%. The futures on all three have continued rallying in Asia, climbing by between 0.50% and 0.60%.
That has not been reflected in a universally positive day for Asian markets, though. The Nikkei 225 leapt 2.50% to what I am reliably told are 29-year highs today. The break of 27,000 seems to have spurred algorithmic buyers as it has climbed to 27,500 over the session. Much of the move, though, can be attributed to Japan’s retail FOMO crowd piling in. Like the US, Japan’s retail trading sector is becoming a force to be reckoned with.
China markets were muted by contrast, as Alibaba (HK:9988) and Ant Financial regulatory fears weigh on sentiment. The China big tech crackdown is likely to be a transitory negative, and not a permanent one, as described above. Shanghai fell 0.50%, with the CSI 300 down 0.22%, but the Hang Seng hitched aboard the US stimulus bandwagon, rising 1.0%.
The South Korean KOSPI climbed 0.33%, after spending much of the day in negative territory. Much of the earlier fall can be attributed to index heavyweights going ex-dividend today. The recovery is impressive and hints at the momentum that markets are building into the year-end.
Elsewhere, Singapore rose 0.25%, with Australia’s ASX 200 and All Ordinaries finishing almost flat on the day, perhaps with one eye on China markets, and the developing Covid-19 situation in Sydney. Kuala Lumpur fell 0.25%, led by medical glove makers. It may well be that investors are starting to look at a post-vaccine future and are lightening up on a sector that was a clear Covid-19 winner.
Despite the Covid-19 concerns in Europe and the UK, early trading suggests that Wall Street’s stimulus rally yesterday and overnight will see European bourses open higher this afternoon. With the data calendar an empty cupboard, the global recovery trade will remain the theme of the day unless a surprise headline spoils the party.