Asian Markets’ Greatest Week In Months, What Has Changed?
After the European Central Bank (ECB) abruptly stopped its negative interest rate policy on Friday, Asian stock markets had their best week in months. The dollar remained off recent record highs, while U.S. futures sank on worries about weak tech results.
FTSE 100 futures were up 0.13 percent ahead of the Europe open, while Euro STOXX 50 futures were down 0.3 percent. The bad earnings announcement from Snapchat owner Snap Inc (NYSE: SNAP) alarmed investors, which caused tech companies to push Nasdaq futures down 0.83 percent. Futures for the S&P 500 were down 0.46 percent. Nikkei in Japan gained 0.37 percent on Friday, marking the sixth day in a row that it has increased. The index increased by 4.17 percent this week, marking its strongest week since March.
Despite a 0.17 percent decline, MSCI’s largest index of Asia-Pacific equities outside of Japan is still on track to post its largest weekly increase in almost two months. South Korea’s KOSPI climbed 2.68 percent for its highest week since February, and Australia’s AXJO gained 2.83 percent for its best week since March.
ECB’s Historical Rate Hike
For the first time in 11 years, the ECB increased interest rates by a larger-than-anticipated 50 basis points, ending a policy of negative interest rates.
After China’s cybersecurity regulator penalized Didi Global Inc. for $1.2 billion, which may have signaled the end of the regulatory crackdown and opened the door for the ride-hailing giant to list in Hong Kong, the Hang Seng index in Hong Kong first rose but then remained unchanged. As evidence that economic pressure is starting to impact American rivals, Snap’s warning about the impact of a slowdown on internet firms caused the share price to drop by over 27% in after-hours trading. Later Friday, Twitter Inc (NYSE: TWTR) will announce its financial results.
OANDA Senior Market Analyst Jeffrey Halley noted in a note that markets would harshly penalize lavishly valued tech firms at the first indication of problems. Meta learned this earlier in the year. The market leader Bitcoin increased by 0.14 percent to $23,161.42 and is up about 11 percent for the week. This would be the cryptocurrency’s greatest week since March.
