Not a good start to the week for Asian stocks with a strong selloff across the region and Wall Street ready to tumble as markets reopen tonight. This is in the wake of the surge in COVID-19 cases across the US and in Beijing, with risk off extending to currencies with gold and Bitcoin both dropping too.
In mainland China, the Shanghai Composite is off by 0.8% going into the close, currently at 2895 points, while the Hang Seng Index has fallen over 2% to 23875 points. Price is nearly at the low of the previous wide channel that traded throughout April and May as this reversal continues with the potential to retrace fully to 22500 or so:
Japanese share markets are the worst off with the Nikkei 225 losing nearly 3.5% in a swift selloff to 22305 points, having wiped out all its gains since late May. Meanwhile the USDJPY pair has gapped slightly lower on the open but recovered to be just above the 107 handle going into The City open with Yen buying obviously to be in favour tonight:
The ASX200 was doing relatively well before the afternoon session, off by a handful of points but then was dumped alongside everything else to finish 2% lower to 5719 points. The Aussie dollar dropped on the open and then fell further in the afternoon session, now breaking below the 68 handle and falling more than 100 pips since the Friday night false high – this is a pretty clear risk off signal:
Eurostoxx futures are down over 2% while S&P futures are off by at least 3% with the four hourly chart of the latter looking ominous to say the least! This overdue reversion is set to wipe out all of the breakout since mid-May:
