Asian Stock Market: Depressed despite Powell’s pressure on yields
|- Asian equities drift lower even global yields pause the latest north-run.
- Powell, RBNZ favored easy money policies but markets don’t leave behind reflation fears.
- Version 2.0 of Powell’s testimony will be the key amid a light calendar, US stimulus voting eyed.
Despite Fed Chair Jerome Powell’s ability to pause bond rally, Asia-Pacific shares fail to recover. The reason could be traced from the economic fears and cautious sentiment ahead of the key events.
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops over 1.0% whereas Japan’s Nikkei 225 marks 0.95% intraday loss during early Wednesday. Australia’s ASX 200 fails to cheer upbeat Wage Price Index for the fourth-quarter (Q4), down -1.08% on a day, while joining hands with New Zealand’s NZX 50 that ignored the RBNZ’s readiness to keep pumping the economy to battle weak inflation and employment fears.
Chinese bourses also flashed red as US President Joe Biden showed readiness to meddle the Canadian citizens’ evacuation from Beijing. Also weighing the mood could be Iran’s rejection of the American demand on the nuclear deal.
Stocks in Hong Kong and South Korea track their Chinese counterparts but India’s BSE Sensex buck the trend with mild gains amid chatters over recovery in the virus conditions and political strength of the ruling party.
Given the light calendar following crucial events, market sentiment has been dull and can be witnessed by small gains of S&P 500 Futures confronting US Treasury yields that drop around two basis points (bps) to stay sluggish around 1.34% by press time.
Read: S&P 500 Futures eye to regain 3,900 after Fed’s Powell battled reflation fears
As US policymakers hint at House voting on President Joe Biden’s $1.9 trillion covid stimulus bill, coupled with the pending version 2.0 of Powell’s testimony, traders may keep their eyes on the relating events amid an absence of major data/event. It should, however, be noted that the unlock news from Japan and AstraZeneca’s update of having 94% success in taming hospitalization seems to keep the buyers hopeful.
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