Markets calm after China slide
A sense of calm returned to Asia today as the China sell-off abated and investors paused for breath and reflection. Overnight, the , and traded sideways to be almost unchanged but still at record highs ahead of heavyweight technology earnings.
Tesla’s (NASDAQ:) record after-hours failed to lift US futures, though, with , and down around 0.15% in Asia.
China Industrial Profits rose by (YTD) YoY for June, near consensus but lower than the May release. Profits rose across both state and private companies. The data suggests that China’s recovery continues, but the Asian giant is grappling with the same supply chain and material cost challenges the rest of the world is experiencing. The data impact will be low as investors remain transfixed on China regulatory risk.
The pause for breath produced a mixed result for Asian markets. The was 0.50% higher, while the South Korean release lifted the by 0.60%, helped by Industrial Profits remaining firm in China today.
In China itself, the was just 0.15% higher, while the fell by 0.35% after plummeting by 4.0% yesterday. Hong Kong was still suffering China technology and credit nerves as the fell by 1.0% today.
Around the region, rose 0.50% after the government hinted at a September reopening date for borders. fell 0.40%, while and crawled to a 0.15% gain. fell by 0.45%, with jumping 1.60% higher.
Australian markets followed Wall Street’s modest 0.25% gains, with the and rising by 0.50%, helped by Victoria and South Australia signaling the end of their recent virus restrictions.
European markets were likely to follow regional Asia and open modestly higher once again. Still, I expect volatility to be modest as we await the Q2 earnings from Apple (NASDAQ:), Alphabet (NASDAQ:) and Microsoft (NASDAQ:). Strong performances will greenlight more gains for Wall Street tonight.
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