• MTS Futures News_PM_20210803

    3 Aug 2021 | SET News



·         Asian stocks slip as Delta spread spooks investors


 

Asian stocks slipped on Tuesday, as the Delta coronavirus variant spread in key markets in the region and put Chinese authorities on high alert, rattling investor confidence.

 

Trade in Asia faced a weaker lead from Wall Street after investors there considered the impact the increasing number global cases of Delta could have on global economic growth.

 

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.40% in early trading.

 

 

 

·         Nikkei ends lower as COVID-19 worries mount; game makers slide

 

Japan’s Nikkei index closed lower on Tuesday as rising cases of COVID-19 weighed on sentiment, while video game makers fell after Chinese media labelled online gaming as “spiritual opium.”

 

The Nikkei share average slid 0.5%, with online game producer Nexon’s dropping 6.51%.

 

Other game makers also dragged the index.

 

The broader Topix sank 0.46%.

 

 

 

·         Chinese online gaming stocks tumble after state media takes aim at industry

 

In Tuesday afternoon trade, shares of Tencent in Hong Kong plunged more than 7% while Netease and Bilibili plummeted 7.96% and 6.28%, respectively. The Hang Seng Tech index declined 1.48%.

 

The losses came after the Economic Information Daily, affiliated with Chinese state media outlet Xinhua, published an article that expressed concern over the amount of time spent by youths on online gaming.

 

Hong Kong’s broader Hang Seng index dipped 0.32%.

 

Mainland Chinese stocks were lower as the Shanghai composite declined 0.21% while the Shenzhen component fell 0.209%.


 

 

·         Foreign outflows from Asian equities surge in July on virus worries

 

Foreigners dumped Asian equities in July on mounting concerns over the Delta variant of the coronavirus, while China's crackdown on its tech companies also hit sentiment.

Last month, cross-border investors sold equities worth a combined net total of $10.6 billion in South Korea, Taiwan, Philippines, Vietnam, Indonesia, and India, data from stock exchanges showed. That compares with an outflow of just $725 million in June



 

·         European markets cautious as investors react to major earnings



 

European stocks were muted on Tuesday as global markets searched for direction amid earnings, rising Covid-19 cases, Chinese tech regulation and U.S. growth worries.

The pan-European Stoxx 600 hovered around the flatline in early trade, with oil and gas stocks jumping 1% on the back of strong earnings from BP, while tech stocks slid 1.1%.

 

On the data front, euro zone producer price inflation readings for June are due at 10 a.m. London time.

 

 

 

·         Stock futures rise slightly after a losing day

 

Stock futures rose slightly in early morning trading on Tuesday after worries about slowing growth sparked a Monday sell-off on Wall Street. 

Futures on the Dow Jones Industrial Average gained 97 points. S&P 500 futures and Nasdaq 100 futures both edged mildly higher.

The spread of the delta coronavirus variant continued to keep investors on edge. The seven-day average of daily coronavirus cases in the U.S. reached 72,790 on Friday, surpassing the peak seen last summer when the nation didn’t have an authorized Covid-19 vaccine, according to data compiled by the Centers for Disease Control and Prevention.

“The delta variant of the virus is now rapidly spreading in the U.S. and a modest pullback in activity can’t be ruled out,” Solita Marcelli, CIO Americas at UBS, said in a note. “But any potential slowdown should be somewhat muted.”

The concern about slowing growth triggered a drop in Treasury yields on Monday. The yield on the benchmark 10-year Treasury note fell as much as 8 basis points to 1.15%. Monday’s slide in bond yields followed data showing the U.S. manufacturing sector expanded at a slower pace than a month ago.

 

So far, 88% of S&P 500 companies have reported a positive earnings surprise for the second quarter, which will mark the highest percentage since FactSet began tracking this metric in 2008.


·         Bearish trend signals stocks are vulnerable to a 10% to 15% correction

The market appears to be doing something that happens ahead of corrections.

When the S&P 500, Nasdaq and the CBOE Volatility Index rise together, BTIG’s Julian Emanuel warns it’s often a precursor to a 10% to 15% pullback.

“Whenever we’ve seen that going back to the beginning of 2018, we were essentially weeks away from a correction,” the firm’s chief equity and derivatives strategist told CNBC’s “Trading Nation” on Monday. “The most recent one being last September. We think history could in fact repeat itself.”

According to Emanuel, the bearish trend has been happening for a couple of months.

“You could trade back to 4,000 [on the S&P 500],” he said. On Monday, the index fell 0.18% and closed at 4,387.16. The S&P 500 is up about 17% so far this year.

Emanuel suggests rising Covid-19 delta variant fears during a seasonally difficult period for stocks creates a more precarious situation.

“Four or five weeks ago, we really weren’t terribly concerned about the delta variant,” he said. “It’s entirely possible that the [economic] growth we expected might come a little bit slower.”


 

Reference: CNBC, Reuters



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