A Report by CYS Global Remit Counterparty Sales & Alliance Unit
Asian markets have largely mirrored the positive sentiment from the S&P 500 reaching a new record high. Recent gains include Japan's Nikkei 225 rising by 1.65%, Australia's ASX 200 by 0.88%, and South Korea's KOSPI by 0.17%. Chinese equities, however, remain subdued amid fiscal policy uncertainties. Key developments such as corporate earnings and U.S. retail sales data are expected to influence risk sentiment.
Nikkei 225: Boosted by Weaker Yen
The Nikkei 225 benefits from a weaker yen due to Japan's gradual approach to policy normalization, which has led the yen to its weakest in two months. This depreciation aids Japanese exporters, enhancing their overseas earnings. The Bank of Japan is likely to hold its policy until after the U.S. elections, though weak household spending presents challenges. Technically, the Nikkei shows strength, with buyers targeting the 41,150 to 41,670 range.
Hang Seng Index: Awaiting Fiscal Clarity
Hong Kong's Hang Seng Index awaits firm fiscal measures from Chinese authorities, with investors cautious ahead of the U.S. elections. The market consolidates between 20,400 and 21,600, anticipating more policy direction. However, breaking above the Ichimoku Cloud indicates potential optimism for a trend reversal.
Straits Times Index: Demonstrating Resilience
The Straits Times Index in Singapore shows resilience, buoyed by strong dividend yields from banks and REITs. Local policies to attract high-quality listings are underway, enhancing market attractiveness. With potential breakouts above 3,650, the STI could approach its record high of 3,900, as the trend remains positive.
Conclusion
As Asian markets respond to S&P 500 highs, their trajectories reflect varied economic and policy contexts. The Nikkei 225 thrives with yen support, the Hang Seng Index awaits fiscal clarity, and the Straits Times Index shows steady strength. Investors continue to watch earnings and economic data to navigate these dynamics and understand the broader financial landscape.
Source: [IG News and Trade Ideas]
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