Financials Bid On Powell’s Remarks

Most major Asia-Pac equity indices are flat to higher at writing, bucking a negative lead from Wall St. Financial stocks caught a bid after Fed Chair Powell’s hawkish remarks on Monday (mainly on a willingness to back a more aggressive 50bp hike in May if necessary), outperforming peers in various indices across the region.

• The Nikkei 225 leads gains amongst regional peers, being 1.4% better off at writing to trade at one-month highs. Large-caps in energy and financials outperformed, while export-oriented names were notably bid as well. The move higher in the latter was facilitated by the Japanese Yen falling to fresh 6-year lows, with the USDJPY printing above Y120.00 for the first time since early ‘16.
• The Hang Seng sits 1.6% higher at typing, operating at session highs on gains in technology stocks after Alibaba Group announced a record $25bn stock buyback plan during the session. Broad sentiment in China-based stocks has steadied (Hang Seng China Enterprises Index: +2.2%) as monetary policy easing expectations have risen, with Xinhua reporting pledges from China’s State Council (chaired by Premier Li Keqiang) for market-supportive measures on Monday, building on dovish remarks made last Wednesday by Premier Li as well. Looking elsewhere domestically, the Hang Seng’s utilities sub-index took a beating, led by a ~14% drop in The Hong Kong China & Gas Co. on an earnings miss.
• U.S. e-mini equity index futures deal 0.1% to 0.4% softer at typing.