Market Talk – Tuesday, Jan. 12

ASIA:

Wall Street firms in Hong Kong including Goldman Sachs and JPMorgan on Monday moved to reduce exposure to Chinese telecom companies named in a U.S. ban on investments in companies Washington considers linked to China’s military. Goldman Sachs, JPMorgan, and Morgan Stanley said in filings to the Stock Exchange of Hong Kong that they were beginning steps to terminate 500 Hong Kong-listed structured products they issued to investors with links to values of telecom companies China Mobile, China Telecom, and China Unicom or local indexes including the Hang Seng Index – whose components include the telecom companies. US custodian bank State Street said that information published by the U.S. Office of Foreign Assets Control (OFAC) mention that an exchange-traded fund which State Street manages was no longer appropriate for U.S. individuals or companies to invest in.

Indian banks may see bad loans double despite signs of an improvement in the economic impact of the COVID-19 pandemic, a report from the Financial Stability and Development Council said on Monday. The gross Non-Performing Assets of banks may increase from 7.5% in September 2020 to 14.8% under a severe stress scenario. Even under a baseline scenario, it may rise to 13.5% by September 2021, the council said. The council is an umbrella group of regulators and releases the FSR report twice yearly to give a detailed overview of the health of the Indian financial system.

Japan’s economy is expected to make its sharpest rebound in decades this year, with consumption set to pick up toward the end of 2021 as the impact of the COVID-19 pandemic on the broader economy eases. The world’s third-largest economy is projected to grow 3.42% in the next fiscal year, which will run to March 2022, after shrinking 5.37% this fiscal year, according to an average of forecasts by 35 economists polled by the Japan Center for Economic Research.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 25.31 points or 0.09% to 28,164.34
  • Shanghai increased 76.84 points or 2.18% to 3,608.34
  • Hang Seng increased 368.53 points or 1.32% to 28,276.75
  • ASX 200 decreased 18.10 points or -0.27% to 6,679.10
  • Kospi decreased 22.50 points or -0.71% to 3,125.95
  • SENSEX increased 247.79 points or 0.50% to 49,517.11
  • Nifty50 increased 78.70 points or 0.54% to 14,563.45
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