Asian Stocks Bounce Back Into Bullish Territory Says Daito Nippon Brokerage

TOKYO, Oct. 12, 2018 /PRNewswire/ - Daito Nippon Brokerage has highlighted that Asian shares have bounced back after the correction that took place globally this week.

Daito Nippon Brokerage research department mentioned that the recent investor sentiment clearly showed that there was a significant amount of uncertainty in Wall Street as stocks continued to decline.

It has been the biggest correction since February 2018, a series of factors have caused the downfall from a Sino-U.S. trade war, the increase in U.S. bond yields and a caution that has been highlighted before earnings release.

The mixture has been a catalyst for investors to pull their capital into other financial exchanges, such as the Asia-Pacific region. Taiwan and Hong Kong rallied over two percent while South Korea and Japan also showed strong gains.

"The U.S. share market as a whole is about 7 percent shy from its 100 day moving average. This is a significant amount as a percentage. When America sneezes, the world catches a cold, although it seems this does not apply to the Asia-Pacific anymore as they have shown strong gains," said Spencer Wright, Head of Corporate Trading at Daito Nippon Brokerage.  

New trade figures that have come from China have showed a Chinese trade surplus with the United States as it hit a record high.

"China alone has showed a solid expansion within its imports and exports showing little effect from its tariffs from the United States," said Connor Murphy, Senior Vice President at Daito Nippon Brokerage.  

China's trade balance had strengthened from $27.9 billion in its previous month to $31.7 billion in September. Year-on-year exports grew, and imports were not far off from what was predicted.

With the Sino-U.S. trade war growing, companies have actually done the reverse and rushed shipments to get ahead of the extra tariffs, which would have otherwise incurred a 10 percent hit.

This can explain some of the rise; however, the U.S. have stated that they will look to increase the figure to a revised 25 percent starting as early as 2019.

SOURCE Daito Nippon Brokerage