Asian Stock Market: Trades mixed amid central banks’ updates, stimulus talks
|- Asian shares drift as mixed signals from central bankers, US relief package stalemate confuse traders.
- Germany’s Merkel directs companies towards Asia, not only to China.
- RBA minutes and policymakers joined RBNZ’s Orr to keep the bears’ happy, PBOC kept status-quo for the sixth time.
- US Congress fails to defy odds of no stimulus before the presidential election.
Asian stocks remain directionless during the pre-European session on Tuesday. The risk barometers struggle to justify the bearish bias of the RBA and the RBNZ, in contrast to the PBOC’s inaction, amid a lack of clear direction for the US coronavirus (COVID-19) stimulus. Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan stays mostly unchanged whereas Japan’s Nikkei 225 drops 0.60% as we write.
Having heard RBA Governor Philip Lowe’s bearish bias in the last week, Aussie traders witnessed downbeat remarks from Assistant Governor (Financial Markets) Christopher Kent> The mood was also backed by RBA minutes suggesting that the Aussie policymakers prefer easy money policy while citing threats to unemployment and inflation. Also joining the bears’ line was the Governor of the Reserve Bank of New Zealand (RBNZ) who highlighted medium-term focus. Though, ASX 200 and NZX 50 traders portray the difference in opinion, cited by +0.70% and -0.70% performance respectively.
On the contrary, the People’s Bank of China (PBOC) defied Bloomberg’s forecast of a 0.25% cut in the reverse repo by keeping the monetary policy unchanged for the sixth time in the row. This weighs on the stocks from Beijing as well as Hong Kong.
Elsewhere, Germany’s Angela Merkel pushed companies to look towards Asia, ex-China, while searching for diversification.
Meanwhile, US Senate leader Mitch McConnell indicates voting on the bill during this week, the Minority leader Chuck Schumer said that the Republican stimulus proposal remains unacceptable.
The mixed sentiment helps S&P 500 Futures to print mild gains but stocks in Indonesia and South Korea follow Chinese footsteps whereas India’s BSE Sensex print mild gains as the COVID-19 numbers have started receding off-late.
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