Asia follows New York’s value versus growth

Asia markets mixed

Overnight, Wall Street went looking for the winners in an inflationary environment and as a result, loaded up on the Dow Jones at the expense of the Nasdaq, mostly on the premise the Fed inflation hunting will resume as the global recovery bids omicron goodbye. The S&P 500 was almost unchanged at -0.06%, but the Nasdaq tumbled by 1.33%, while the Dow Jones added 0.58%. In Asia, all three indexes have retreated, down around 0.25%. A fire at the world’s most critical semiconductor machine manufacturer, Dutch company ASML, could be weighing on sentiment.

Extreme ultra-violet lithography systems aside, Asian markets have split in roughly the same direction as New York today. The Nikkei 225 is unchanged, having reversed earlier losses, but the South Korean Kospi is 1.30% lower and Taipei is down by 0.35%. The ASML fire potentially weighs more on the latter two.

China markets are also in retreat on pre-Chinese-New-Year funding fears, China property developers, US-listed technology groups and Huarong with no signs from the PBOC that it intends to ease the funding crunch as it keeps money tight via the daily repo. The Shanghai Composite is down 0.85% with the CSI 300 easing 0.65% lower. Hong Kong is down 0.75% today.

In ASEAN though, Singapore has eased 0.25%, but Kuala Lumpur is 0.20% higher and Bangkok is up 0.30%, with Jakarta and Manila unchanged. Most exchanges having given back intra-day gains. Australian markets are lower after jumping the gun on the value trade earlier this week with some stellar gains so far. The easing of the S&P 500 and Nasdaq overnight and today has prompted some profit-taking down under. The ASX 200 and All Ordinaries are 0.35% lower.

Europe is likely to find gains hard to find initially with Asia’s mixed momentum subsiding and turning to a more generally cautious note. If the fire damage at ASML’s Berlin factory is minimal, that could be enough to encourage the bulls back again as none likes the thought of a drawn-out semiconductor shortage.

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