Asia market trends Wednesday: Holiday mood may not extend to markets

Ceramic cats at retailer DaisoCeramic cats at retailer Daiso

Markets around the region may be groggy on Wednesday after the long Christmas and New Year’s holidays, but the mood could be on the grim side after U.S. and other markets closed out 2018 with their worst performance since the Global Financial Crisis in 2008.

Weak China data may also dampen traders’ windscreen.

China’s official manufacturing PMI for December fell into contraction territory for the first time in more than two years, to 49.4 below the 50 level, which marks the divider between contraction and expansion. It also missed a Reuters poll forecast for 49.9 and was down from 50.0 in November.

“The weak official manufacturing PMI released [Monday] supports our view that the worst is yet to come. Looking ahead, we see more headwinds to growth from weakening domestic demand, the ongoing credit downcycle, a cooling property sector and lingering China-U.S. trade tensions,” Nomura said in a note on Monday. “We maintain our call for more policy easing/ stimulus in the quarters ahead.”

But it noted that the official non-manufacturing PMI was a “bright spot,” rising to 53.8 in December from 53.4 in November, beating a consensus forecast for 53.2.

Nomura said that pointed to a continued growth rebalancing toward the tertiary sector.

Indexes

Nikkei 225 index futures for March were up 95 points at 19,955 at 7:26 A.M. SGT, according to CME Group data; that compares with the index’s close at 20,014.77 on Friday. The Tokyo Stock Exchange will be closed on Wednesday and Thursday.

Singapore’s Straits Times Index was up 0.50 percent at 3068.76 on Monday; January futures for the index were at 3071 on Monday, while February and March futures were at 3073 and 3070 respectively.  at Monday’

Hong Kong’s Hang Seng Index was up 1.34 percent at 25,845.699 on Monday, while China’s CSI 300 index was up 0.67 percent at 3010.65 on Friday.

Indonesia’s IDX Composite Index edged up 0.062 percent to 6194.50 on Friday, while Malaysia’s KLCI index shed 0.09 percent to 1690.58 on Monday.

The Dow Jones Industrial Average ended Monday up 1.15 percent at 23,327.46, the Nasdaq Composite was up 0.85 percent at 6635.28 and the S&P 500 gained 0.85 percent to 2506.85. Futures for the three indexes were solidly higher in early trade.

Oil

Nymex WTI crude oil futures for February were up 0.86 percent at US$45.80 a barrel at 7:01 A.M. SGT, while ICE Brent crude futures for March were up 1.11 percent at US$53.80 a barrel at Monday’s close, according to Bloomberg data.

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