Geopolitical Tensions Weigh On US Futures, China Markets Down On Return

Regional equity markets are mostly tracking lower in the first part of Monday trade. A number markets are out though, with Japan, South Korea and Taiwan closed for holidays. Hong Kong stocks haven't commenced trading yet either due to adverse local weather conditions. US equity futures are down sharply, as the market digests the news from the weekend of the surprise Hamas attack on Israel.

• Eminis are down a little over 0.80% at this stage, last near 4306. We haven't tested sub 4300 yet, while Friday lows near 4240 remain some distance away. Nasdaq futures are down by a similar amount.
• No doubt focus will be on concern around escalation of the Israel/Hamas conflict to wider parts of the Middle East, with focus on spillover to oil prices and broader risk appetite.
• The other focus point has been the return of China markets after the Golden Holiday week break. At this stage, sentiment is weaker, with the CSI 300 off by nearly 0.60% at the break. Anecdotes around holiday spending were below government estimates, albeit up strongly compared to 2022 (per BBG reports, see this link), while housing activity was also weaker than hoped for (see this link).
• The CSI 300 was off by more than 1% in early trade, but these losses have been pared somewhat.
• Thailand shares remain under pressure in SEA. The SET off a further 0.70% at this stage. The index back to late 2020 levels. Criticism of the government's proposed cash hand out by former heads of the BOT is one area of concern, while higher oil prices will also be weighing.
• Most other markets are weaker, but losses are reasonably modest at this stage.