Asia trades mixed after US declines, modest moves seen

Asia Market Update:Asia trades mixed after US declines, modest moves seen; Big CN telecoms rebound on NYSE delisting reversal; Yuan extends gain, later pares rise; Georgia runoff still in focus.

General Trend

- Hang Seng TECH index drops, Alibaba drops as the press speculates on the whereabouts of Jack Ma; Finance index declines; Chinese Telecoms and CNOOC rebound on the statement from the NYSE

- Consumer Staples and IT firms rose during the morning session in Shanghai; Financial and Property sectors remained weaker after recent PBOC move related to property loans

- Decliners in Australia included Consumer Discretionary, Energy and Financial firms; Gold and Iron Ore miners rose

- TOPIX Air Transportation index extends decline in Japan; Gainers include Brokerage, Electric Appliances and Marine Transportation firms

- Taiwan Semi said to plan to build chip packaging facility in Japan

- AUD/USD rises amid USD weakness and prior decline

- The Georgia runoff election is due to be held on Jan 5th (Tues)

Headlines/Economic Data

Australia/New Zealand

-ASX 200 opened -0.4%

- STO.AU Final Investment Decision for the $235M Phase 3C infill drilling program at the Bayu-Undan field in the Timor Sea, offshore Timor-Leste

- (AU) Western Australia reports UK variant of COVID found in hotel quarantine location

Japan

-Nikkei 225 opened -0.4%

- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Lowers purchases of 1-3 year JGBs

- (JP) Follow Up: Japan expected to declare state of emergency as soon as Thursday - Nikkei

- 7267.JP Spokesperson: To idle UK plant for 2 days (Jan 5-6) due to global supply issue

Korea

-Kospi opened 0.0%

- (KR) Bank of Korea (BOK) Gov Lee: economy must address the issue of liquidity hoarding in asset markets after the pandemic gets under control; financial companies must continue to support households and companies this year

- (KR) South Korea fin Min Hong: Govt to carefully manage market liquidity while closely paying attention to possibility that sharply increased liquidity would create herd behavior into asset markets - New years speech

- 068270.KR Exec: To release clinical study data of COVID-19 treatment next week – Yonhap

- (KR) South Korea President Moon: To focus on job security, housing market steps, need to achieve fast, strong economic recovery; virus spread being slowly contained after peak - Cabinet meeting

- (KR) South Korea Ministry of Trade, Industry and Energy forecasts 2021 chip exports at $109.3B, +10% y/y - South Korea press

China/Hong Kong

-Hang Seng opened -0.7%; Shanghai Composite opened -0.3%

- (CN) NYSE: NO LONGER PLANNING TO DELIST CHINA TELECOMS

- BABA Alibaba founder Jack Ma has not made any public appearance in last 2 months; Reportedly suspected to be missing – press

- (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY20B in 7-day reverse repos prior; Net drain CNY130B v Net drain CNY120B prior

- (CN) China State Council passed draft stamp tax law, bringing the stamp duty on securities trading into its legal framework

- China PBOC sets Yuan reference rate: 6.4760 v 6.5408 prior (strongest level since June 21, 2018)

- (CN) China Coal Association and coal transportation and distribution association call on coal sector to boost supply and keep prices within a reasonable range, as increasing domestic demand fuels rising pressure in the spot market - Xinhua

Other

- 2330.TW Said to build a chip packaging facility in Japan – Press

North America

- (US) Fed Bostic (dove, non-voter): Recalibration of US central bank asset purchases could come in short order if COVID vaccine and economic recovery take hold, new stimulus package will help avoid some of the worst outcomes, but still watching for vulnerabilities

- (US) Fed's Mester (FOMC voter): Monetary policy will need to remain highly accommodative for "quite some time"; Near term outlook to remain weak as virus surges; Medium range outlook to show considerable improvement

- (US) Treasury Department posts guidance on China Military Companies: Says US persons are not required to divest their holdings in publicly traded securities of the Communist Chinese military companies identified in the Annex to E.O. 13959 by January 11, 2021

Europe

- DLG.DE Raises Q4 Rev $436-441M (prior $380-430M) due to stronger than expected consumer demand for 5G phones and tablets

- (UK) PM Johnson: confirms national COVID lockdown starting Jan 5th; we must do more to tackle virus while vaccines arrive

Levels as of 12:15ET

- Hang Seng -0.1%; Shanghai Composite +0.2%; Kospi +0.1%; Nikkei225 -0.3%; ASX 200 -0.0%

- Equity Futures: S&P500 +0.0%; Nasdaq100 +0.0%, Dax +0.0%; FTSE100 -0.3%

- EUR 1.2278-1.2246; JPY 13919.-102.97; AUD 0.7710-0.7661; NZD 0.7216-0.7168

- Commodity Futures: Gold -0.1% at $1,944/oz; Crude Oil -0.1% at $47.59/brl; Copper +0.7% at $3.59/lb