Market Close Mar 25

Markets upbeat on recovery prospects

Reflation continues to underpin investor mood; Delisting threat rattles Chinese equities; More falls ahead for Bitcoin as it breaks key support on charts

Markets upbeat on recovery prospects
Barclays has forecast global GDP growth of 6.4% in 2021 and 4.7% in 2022.

HONG KONG: Asian markets were broadly higher on recovery hopes but Hong Kong and mainland China markets underperformed after the US SEC started a process that could force Chinese companies to delist from US exchanges if they did not comply with US auditing standards.

But oil remained on edge as efforts continue to dislodge the ship stuck for a third day in the Suez Canal, a critical trade route.

The US dollar was steady at 92.6 against a basket of currencies, and US Treasuries were unchanged with the 10-year yield stable at 1.61%.

Read more: Chinese investors looking at rare earths as bitcoin replacement

Japan’s Nikkei 225 index added 1.14%, Australia’s S&P ASX 200 edged up 0.17% but Hong Kong’s Hang Seng index and China’s CSI300 ended flat amid prospects Chinese companies may be delisted from US exchanges. Regionally, the MSCI Asia Pacific index advanced 0.82%.

“The world economy is set to grow at its fastest rate in decades, powered by large US fiscal stimulus, Covid-19 vaccination progress and excess savings built over the past year,” said Ajay Rajadhyaksha is Head of Macro Research at Barclays.

He said the US and China are set to be twin engines of strong global growth this year, with the EU a relative laggard. Barclays has forecast global GDP growth of 6.4% in 2021 and 4.7% in 2022, with the US and China growing at 6.7% and 9.4% respectively this year.

BITCOIN FALLS

Bitcoin, the largest cryptocurrency, fell 2% to a two-week low of $52,950 and analysts said there could be more falls ahead as it had breached a critical technical support on the charts.

“The trend break is certainly a warning sign for bitcoin,” said Fawad Razaqzada, Market Analyst, TF Global Markets.

He said that even if a proper sell-off does not materialise today, traders need to proceed with caution because of recent signs risk appetite is slowly fading away across the financial markets with Chinese equities slumping, crude and copper also weakening.

“Bitcoin has been correlating positively with risk assets over the past year and if that relationship remains strong then the digital currency could follow suit. A clean break below the $50K hurdle, if seen, could be the trigger behind a potentially sharper drop,” he added.

Asia Stocks

  • Japan’s Nikkei 225 index added 1.14%
  • Australia’s S&P ASX 200 edged up 0.17% 
  • Hong Kong’s Hang Seng index ended flat
  • China’s CSI300 was unchanged
  • The MSCI Asia Pacific index advanced 0.82%.

Stock of the day

Alibaba and JD.com shares fell as much as 6.4% and 6.6% after the the SEC said it will implement a law that aims to remove Chinese companies from US exchanges if they fail to comply with American auditing standards for three years in a row. Both the Chinese tech giants have US listings.

Also on ATF:

Suez grounding threatens oil supply as insurance claims loom

H&M faces China boycott over Xinjiang cotton worries 

Nikkei Hang Seng CSI300 oil bitcoin US SEC