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It is gut check time for the market

  
Analysis, Global Indices

The equities selloff intensifies in Asian trading

  • Nikkei -3.7%
  • Hang Seng -3.1%
  • Shanghai Composite -2.1%
  • S&P 500 futures -0.5%
  • Nasdaq futures -1.0%
  • Dow futures -0.5%
  • Russell 2000 futures -1.6%
Asian equities are having their worst session since 23 March last year as the selloff continues. US futures are also slumping heavily as the drop yesterday extends further. The big question is, how much more pain can investors stomach in this latest episode?
The stunning rout in the bond market yesterday led to a selloff in risk but despite calmer tones today, it isn’t yet convincing dip buyers to step in.
It is still early in the day of course but all things considered, there might be more downside in store ahead of the weekend as this may be part of a healthier correction/flush in the equities space in the bigger picture of things.
Looking at the charts, we are seeing some key levels being called into question.
Nikkei 26-02

Nikkei 225 falls by 4% on the day to end February trading

  
Analysis, Global Indices

The Nikkei closes down 4% to its lowest levels since 8 February

Nikkei 26-02
That said, on the month itself, the Nikkei still posted a gain of 4.7% despite a rough final week. Asian equities are slammed across the board, feeding off the negative mood from Wall Street overnight and as the jitters continue today.
The Hang Seng is down 2.8% while the Shanghai Composite is down 1.6%.
For some context, the daily drop in the Nikkei today is the biggest since April last year.
Elsewhere, US futures are looking rather poor as well. S&P 500 futures are down 0.5%, Nasdaq futures down 1.0%, Dow futures down 0.6%, and Russell 2000 futures down 1.7%.

Nikkei 225 closes higher by 1.67% at 30,168.27

  
Analysis, Global Indices

Asian equities bounce back after a beating yesterday

Nikkei 25-02
Stocks are off to a good start on the day with Asian investors taking comfort from the gains in Wall Street overnight, with the Nikkei paring the drop from yesterday’s session.
The Hang Seng is also seen trading up by 2.1% after a sharp decline yesterday while the Shanghai Composite is up 0.7% going into the closing stages.

 

Overall, risk sentiment is keeping in a firmer spot as we look towards European trading.
US futures are also higher so far today and that is keeping the calm in the market mood, with Treasury yields also marked higher across the curve. 10-year yields are up 2.4 bps to 1.40% while 30-year yields are up 3.4 bps to 2.267% currently.
A sharp selloff in bonds yesterday prompted some jitters in equities, which were then reversed. So, this is still one area to keep an eye out for in case there are spillovers today.

European indices close at session higher, erasing earlier declines

  
Analysis, Global Indices

The major European indices erased earlier declines and are closing higher on the day. A snapshot of the provisional closes shows:

  • German DAX, +0.8%. The low for the day reached -0.06 percent
  • France’s CAC, +0.3%. The low for the day reach -0.37%
  • UK’s FTSE 100, +0.6%. The low for the day reach -0.81%
  • Spain’s Ibex, +0.2%. The low for the day reach -0.57%
  • Italy’s FTSE MIB, +0.7%. The low for the day reach -0.3%

The Hang Seng suffers biggest daily drop since May last year amid HK’s first trading tax hike since 1993

  
Analysis, Global Indices

China investors sell a record $2.6 billion worth of Hong Kong stocks

HSI

The selloff in the Hang Seng and Chinese markets is one the big stories in Asian trading today, which in part is also contributing to the softer risk mood earlier. At the close, the Hang Seng is down 3% and posts its biggest daily drop since 22 May last year.

This comes after the Hong Kong government announced to increase stamp duty on stock trades for the first time since 1993, provoking an exodus of Chinese investments.

European indices end the session with mixed results

  
Analysis, Global Indices

Spain’s Ibex bucks the negative trend

The major European indices are ending the session with mixed results. Spain’s Ibex buck the trend with solid gains. France’s CAC and UK FTSE 100 is near unchanged. The German DAX is lower.

The snapshot of the provisional closes are showing:
  • German DAX, -0.7%
  • France’s CAC, +0.1%
  • UK’s FTSE 100, +0.1%
  • Spain’s Ibex, +1.5%
  • Italy’s FTSE MIB, -0.5%
In the benchmark 10 year note sector, yields are higher across the board with the Italian yields up the most at 4.4 basis points. German yields are up the least at 2.2 basis points.  France’s 10 year yield got closer to the 0.0% level. It’s high yield reached -0.030%.
Spain's Ibex bucks the negative trend
In other markets, US yields remain mixed with modest changes. The 5 year yield is down -2.4 basis points while the 30 year yield is up 1.1 basis points. The 2 – 10 year spread has narrowed modestly to 124.46 basis points from 125.44 basis points at the close yesterday.
US yields are mixed
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