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Asian Stocks Rise, Follow U.S. Lead After Volatile Day

Stock MarketsJan 28, 2021 09:58PM ET
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By Gina Lee

Investing.com – Asia Pacific stocks trended higher Friday morning, following the lead of U.S. markets that on Thursday reversed some heavy losses from a day earlier with online trading platforms taking steps to limit unprecedented and speculative volatility in a handful of stocks.

All U.S. benchmarks finished the Thursday trading session in positive territory and Asia followed suit in the last day of a volatile week.

Japan’s Nikkei 225 was flat by 9:00 PM ET (2:00 AM GMT) while South Korea’s KOSPI was down 0.59%. In Australia, the ASX 200 rose 0.49%.

Hong Kong’s Hang Seng Index (HK:2833) was up 0.33% while up north in mainland China the Shanghai Composite was up 0.16%. The Southern Shenzhen Stock Exchange Component Etf Feeder A started the morning trading session up 1.02%.

“There are a lot of reasons to continue to think we may see gains and I’m not negative on the stock market, I would just say that it’s rich in some areas right now,” Michael Cuggino, a portfolio manager at Pacific Heights Asset Management LLC, told Bloomberg TV.

U.S. markets ended the day with gains Thursday, reversing sharp losses a day earlier. The larger online trading platforms Robinhood and Interactive Brokers (NASDAQ:IBKR) put caps on trading of shares that have seen unprecedented levels of volatility in recent days after being named in some Reddit discussion forums and attracting huge numbers of retail investors.

The platforms restricted shares in several stocks, including GameStop (NYSE: NYSE:GME) and BlackBerry (NYSE: NYSE:BB), which have risen by hundreds of percentage points in recent days. Share prices in both these companies fell more than 40% by the close Thursday, although GameStop went through a wild ride that saw it more than triple in value at one point.

For most investors, however, a more significant concern going forward continues to be the impact of COVID-19 as new variants spread globally and countries extend lockdowns, although both the U.S. and India, two of the countries most affected by the pandemic, have seen something of a slowdown in new cases this week.

In the broader economy, the pandemic caused the worst economic performance in the U.S. since World War Two. A preliminary estimate from the U.S. Commerce Department released Thursday suggested that U.S. gross domestic product grew at an annualized 4% in the fourth quarter of 2020, roughly in line with forecasts, but, for all of 2020, U.S. GDP fell 3.5%.

With that performance in mind, investors are now looking at the progress in a $1.9 trillion aid plan that President Joe Biden has proposed, although it is unclear how, when or if the package will move forward.

Asian Stocks Rise, Follow U.S. Lead After Volatile Day
 

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Ross Dre
Ross Dre Jan 28, 2021 10:27PM ET
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These articles never seem to age well. The market seems to be setting up to for a big reversal.
 
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