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Economy

Asian Stocks up As Archegos Fallout Fears Calm

Asia’s stocks were mostly up Tuesday morning, as investors kept in check further damage arising from Archegos Capital Management’s collapse. However, the current pace of the U.S. economic recovery from the pandemic and the vaccine rollout revive inflation worries.

To hedge potential losses, some traders demanded higher rates. Bank debts were caught up in the Archegos chaos, including Nomura and Credit Suisse Group. So far, the company has said: “all plans were being discussed.”

As the Asian session progressed on Tuesday, credit markets remained calm. 

It’s never better when you are a shark in the water to be buying from a forced seller. This was a statement from Spotlight Asset Group chief investment officer, Shana Sissel, skeptical of the potential for broader market fallout from Archegos.

She finds it hard to believe that this would have a massive systemic impact on global markets. She added that this is beyond the few positions that they held.

Stocks on The Move

Meanwhile, elsewhere, as Hong Kong prepares to ease some of its strict restrictive measures even further from Apr. 1, its Hang Seng Index gained 1.17%. Moreover, Hong Kong’s National People’s Congress Standing Committee’s unanimous vote reduced the number of directly elected seats to its Legislative Council. Also, a vetting body to determine who can stand for election will be created.

By 11:24 PM ET (3:24 AM GMT), Japan’s Nikkei 225 added 0.05%. Nomura Holdings Inc said it is too early to estimate the impact of losses tied to him. The bank reportedly counts Archegos head Bill Hwang as a client.

In Tuesday’s early session, the MSCI’s broadest index of Asia-Pacific shares outside Japan was marginally higher by 0.08%.

In South Korea, the KOSPI climbed 1.09%, while in Australia, the ASX 200 edged down 0.58%.

China’s Shanghai Composite and the Shenzhen Component were up 0.56% and 1.06%, respectively. Mainland China’s CSI300 index was 0.18% higher in early trade.

Investors are looking for further clues about the Chinese economic recovery. They are waiting for Wednesday’s release of the manufacturing and non-manufacturing Purchasing Managers Indexes (PMIs).

The market’s focus is instead on the progress of the U.S. economic recovery from COVID-19. On Wednesday, U.S. President Joe Biden will reveal a further stimulus program with a tilt toward infrastructure. 

Meanwhile, on Wall Street, the Dow Jones Industrial Average ticked up 0.3%, the S&P 500 shed 0.09%, and the Nasdaq Composite lost 0.6%.

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