Lower In Asia; Nikkei Gives Up Holiday Gains

Most Asia-Pac equity indices are in the red at typing, following a negative lead from Wall St., and a well-documented series of risk-off headlines over the weekend.

• The Nikkei 225 trades 2.2% lower after opening lower, operating a touch above session lows at writing. The move lower has unwound the Nikkei’s post-Golden Week holiday gains, with the benchmark index facing resistance above 27’000 points. Large-caps such as Fast Retailing Co (-6.2%) and Keyence Corp (-3.2%) provided most drag to the index, Ultimately, ~200 of the index’s 225 constituents are in the red at typing, with only the utilities and energy sub-indices managing to eke out gains.
• The Australian ASX200 is 1.2% worse off at typing, with notable losses in the major miners such as Rio Tinto (-3.0%), BHP Group (-1.5%), and Fortescue Metals (-6.2%) neutralising gains seen in energy-related equities. A note that the 6-month correlation between the ASX200 and the AUD has recently climbed to decade-long highs, with today’s AUD weakness (noting broader weakness in the commodity-related currencies as commodities such as iron ore have come under pressure in Asia-Pac dealing) contributing to underperformance in the relatively commodity-heavy Australian equity space.
• The CSI300 deals 0.7% weaker at typing, with weakness in consumer discretionary and consumer staples equities bearing the brunt of losses in the index. Equity benchmarks saw virtually no reaction to Chinese trade data showing Chinese exports slowing to near two-year lows.
• U.S. e-mini equity index futures sit 0.9% to 1.0% worse off, operating at/around multi-month lows made earlier in the session at typing.