APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead

APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead

Equities 8 minutes to read
Jessica Amir

Market Strategist

Summary:  Better than expected company and economic news lifts global markets. We dissect what people are buying today, the potential investment opportunities ahead, and cover the uncertainties, plus what you need to consider before Australia and the US enter a new cycle with rates rising for the first time in 13 years. APAC considerations and ideas below

Written by APAC Strategists Jessica Amir in Australia and Redmond Wong in Hong Kong.

What’s happening in markets?

  • The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) moved in different directions on Wednesday; the S&P500 up 0.1% to 4,475 points (its highest level in 8 days), while the Nasdaq fell 0.1%. A bit of optimism was in the air after better than expected retail sales numbers came out for January, with sales rising 3.8% (beating the 2% expected). While company news was mostly better than expected. Disney (DIS) announced its diversifying its business and will be developing residential communities. However, uncertainty lingers over markets for two reason; Ukraine/Russian tensions, while secondly investors await the outcome of the Fed’s next meeting outcome, with a 80% chance the Fed will raise rates by 0.5%.
  • The Australian share market ASX200 (ASXSP200.I) today rose 0.7% to 7,336 points, its highest level since 19 January. The market rose above a key level, and broke above its 50 and 200 day moving averages on better than expected company news and economic data. 12,900 Aussies gained jobs last month, beating expectations, while the Australia unemployment rate showed Australian unemployment held at its lowest level since 2008, 4.2% in January 2022. See below for key Australian company news. 
  • Hong Kong’s Hang Seng (HK50.I) and China A shares: Hong Kong stocks and A Shares were steady within their recent trading ranges. Hang Seng was up 1.49%. Tech, education, autos and gaming stocks were the top gainers. Hang Seng Tech up 2.3%. A shares CSI 300 went up 0.39%. Infra-structures and rare earth names were bright spots.  China’s Ministry of Finance released the local government debt limits for 2022 earlier than usual. Rare earth price continued to rise sharply in China due to disruption to rare earth export  in Myanmar, which ranks number 3 in rare earth production globally.
  • Commodities : Crude oil (OILUSMAR22 & OILUKAPR22) continued to retreat to US$91.44 after Moscow partially pulled back troops from the border with profit taking affecting the price. Consider that Russia supplies 8% of global supply. Beyond the Ukraine tension, the oil market remains tight. So while oil prices could continue to correct/fall, the long term trend of oil hitting US$100 a barrel remains in sight. Gold (XAUUSD) gained stable footing rising to US$1,871. Iron ore (SCOH2) futures fell 4% on Thursday to US$134.55, erasing Wednesday’s jump of 3%. In totality, over the last five days iron ore fell 12.5% after Beijing accused market participants of stock piling iron ore. The Chinese government meanwhile is probably going to roll out demand-boosting stimulus this year, given it just relaxed its steel emissions targets by five years. Also keep in mind China’s central bank cut rates three times and is likely to cut again, to encourage big infrastructure and property spending. Of course property/infrastructure works require iron ore and other industrial commodities. Technically Iron ore’s price remains pressured lower, and could fall to $120, near its 200-day moving average, before possibly extending its long term uptrend in line with expectations of China buying more iron ore. BHP (BHP) the world’s biggest iron ore miner trades higher at $48.33 today, while Rio Tinto (RIO) shares trade up 1.5%.

What to consider

  • We are moving to a new cycle. You must consider this will likely shift markets. The Fed’s January meeting minutes released overnight confirmed the Fed will likely to hike rates and reduce its balance sheet soon. The takeaways? Firstly; it’s the second time in history the Fed has been given a mandate from the White House to fight inflation by rising rates. Secondly; consider the Fed will embark on a full interest rate hike cycle for the first time in 12 years. Thirdly; rising rates reduces the speed of economic growth and tech innovation. Recall, over the last 10 years tech stocks were the best performers, for the next 10 years, the energy sector will probably rein given anemic energy supply.
  • The lessons from ASX earning seasons numbers today? As per our quarterly outlook and recent commentary, energy stocks are continuing to shine and produce better than expected earnings results. We saw that in the US too amid their earnings season. Today, Australia’s biggest oil and gas company, Woodside Petroleum (WPL) reported better than expected profits, and its best profit in seven years. WPL shares surged 4.4% to a two year high. Meanwhile Origin (ORG) reported its closing its coal-fired power in station in 2025, 7 years earlier than expected to reduce emissions. This highlights the lack of coal in the market will continue, while the energy body, the US Energy Information Administration (EIA) says coal demand from Russia, India Brazil is surging and will hit another record high this year. Separately shares in CSL (CSL), Australia’s third biggest company, jumped 4% to $274.50, (its highest level in a month) and broke above its 50-day average after reporting stronger than expected profits and seeing a turnaround in revenue from its biggest revenue stream (its blood therapy). CSL is a 'NextGen' company to watch, given it’s a pioneer and the world’s biggest bloody therapy company.
  • Hong Kong & China A share marketsIn infrastructure construction news; The Chinese Government’s early release of the annual increase in local government debt limits for 2022 was perceived to be motivated by its desire to front load infrastructure construction. Among the RMB 31 billion local government project finance debts issued in January, 75% went to infrastructure.  As for margin compression due to high energy prices; The recent sharp fall in the share price of China Resources Power (836.HK) as a result of negative profit warnings from the Company should remind investors about the margin compression impact on industries from high oil, natural gas, and coal prices. In the Property sector; Local governments in China have reportedly been rolling out a new round of home purchase subsidies, relaxing rules about borrowing from social security fund and rules in hukou (household registration) to stimulate home buying since the beginning of the year. The PBoC has also released supporting measures to financing affordable rental housing projects.

Trading ideas

  • General: As above, we believe we are moving into a new cycle. The Fed is set to embark on an rising interest rate cycle for the first time in 12-13 years, the Australian central bank is about to embark on rising interest rates cycle for the first time in 13 years too. This means markets are likely to pivot and enter a new cycle. We think the best performers of the next 10 years probably won’t be in technology, who were the best performers over the last 10 year. Meanwhile, we think the best performers for the next decade will be in in commodities and energy, given anemic supply and while infrastructure spending at the government level is increasing, along with China stimulus.
  • Asia: We re-iterate our theme of looking at energy and commodities and continue to look for opportunities in companies that may benefit from infra-structure spending in China.

For a global look at markets – tune into our Podcast 

For prior Australian market and APAC updates - click here. 


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.