Asian Shares Erased Early Gains, Multiple Factors to Weigh Market Movement This Week

Asia bourses retreated from morning rally, gained on optimism after reported rise in Chinese private gauge of Manufacturing Purchasing Manager’s Index (PMI), Japanese election results, and all-time highs for U.S shares and.

Equity indices in Asia also tracked performance after U.S. and European futures gained on Friday.

Nikkei 225 inched up by 2.61% factoring in Prime Minister Fumi Kishida’s Liberal Democratic Party winning outright majority.

The CSI 300 and Hang Seng erased early session gains by 0.31% and 1.07 % respectively. Chinese private gauge of PMI showed resilience backed by strong domestic demand expanding at its fastest in four months in October.

The SET index is trading in the negative down by 0.47%. Earlier today the country marked its full-scale reopening to international tourists.

In the fixed income market, U.S. treasuries gap between 5 year and 30 yield narrowed. This suggests investors are anticipating slowdown in economic recovery given central banks reducing economic supports amid soaring inflationary pressure.

The Chinese property industry still remains a key focal point given four developers defaulted last and Evergrande narrowly averting default twice.

Traders are shying away from long positions in the oil futures with speculative weaving OPEC+ might increase production in this Thursday’s meeting.

The FOMC rate decision and FED chair’s news conference along with U.S. factory orders on Wednesday, Bank of England’s decision on interest rate and decision on asset purchases on Thursday, U.S. unemployment and payroll numbers are key factors that are to determine the direction of the global equity market this week.

Majority of big banks expect FED to announce tapering on November 3rd.

Note: All indices quotation are as of Thailand time 13:35 hours