It’s been a mixed day for Asian
equity markets but the stand out winner was the Shanghai Composite where
the index jumped 1.5% off the back of fresh stimulus hopes. The driver seems to
be in the smallest detail, but with state media reporting that the Bank of
China plans to broader the definition of “first time mortgages”, there’s hope
that this will stem the recent slide in property sales. What’s more, brokerages
are also seeing brisk business pushing their shares higher as speculation
builds over that link between the Shanghai and Hong Kong exchanges. Elsewhere
in the region the picture has been less compelling – the Hang Seng found its
way to post some modest gains but the Nikkei is sliding following a drop in
USD/JPY. Comments by Prime Minister Shinzo Abe highlighted the fact he’s not
necessarily ready to see the Yen go through a massive devaluation.
Wall Street had a rough ride
yesterday and futures are suggesting we might see something of a modest rebound
at the open. We have new home sales figures and mortgage application data due
for release either side of the opening bell so this could provide some fresh
direction but arguably if prospects in Asia are looking a little more upbeat
then the positive sentiment can be justified. Ahead of the open we’re calling
the DOW up 9 at 17065 and the S&P unchanged at 1983.
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