Asian Stock Market: Bears keeping reins on Evergrande, growth chatters

Asian markets print losses led by China, Hong Kong on Evergrande woes.
Fears of untimely rate hikes to weigh on the nascent growth exert additional downside pressure.
Bonds, gold price gain but DXY fails to cheer the safe-haven status.

Anil Panchal FXStreet

Asian shares remain on the back foot, with China and Hong Kong dropping the most, heading into Thursday’s European session. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan drops 0.60% whereas Japan’s Nikkei 225 stays depressed around 29,689 by the press time.

Evergrande’s decision to sell its entire stake in HengTen Networks Group Ltd, that too at a hefty loss, propel the bearish bias as this becomes the first time the China-based company marked panic. Adding to the woes was losses of Chinese tech giants backed by the news that another firm from Beijing, namely Yango, struggles to pay a bond coupon.

Amid these plays, stocks in China and Hong Kong are down over 1.0% while Japan’s Nikkei can’t cheer the stimulus news. Japan's economic stimulus package will likely require fiscal spending of around 55.7 trillion yen ($488 billion) due to huge amounts of cash payouts, the Nikkei newspaper reported on Thursday.

Elsewhere, New Zealand’s NZX 50 follows the suit with the strong RBNZ Inflation Expectations data for Q4. However, Australia bucks the trend amid optimism towards economic growth following the latest unlocks. On the same line was Indonesia’s IDX Composite as investors brace for another dovish halt by the Bank Indonesia.

India’s BSE Sensex drops near 0.75% at the latest amid growth fears as Fedspeak can’t tame reflation woes and hints at the tighter monetary policies going forward. The conditions, if witnessed, could be severe as the global economy isn’t yet out of the woods and the COVID-19 cases jump back in certain areas of Europe.

On a broader front, US 10-year Treasury yields and the US Dollar Index (DXY) extend the previous day’s pullback from the multi-day peak whereas gold prices fade the latest gains. It should be noted, however, that the S&P 500 Futures print mild gains by the press time.

Looking forward, central bankers and chatters concerning China, as well as Evergrande and stimulus, will be the key to follow for fresh impulse.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD rebounds above 1.3200 as USD loses traction

GBP/USD starts the week on a bullish note and advances toward 1.3250 on Monday. The pair recovers ground as the US Dollar uptrend falters and traders resort to profit-taking ahead of Tuesday's US-Iran peace talks and Fed Chair Kevin Warsh's appearance on Wednesday at the ECB Forum.

EUR/USD clings to modest gains near 1.1400

EUR/USD gains traction on Monday and trades moderately higher on the day above 1.1400, helped by a broadly weaker US Dollar. Traders continue to assess the developments surrounding talks to end the US war with Iran. The European Central Bank's annual forum and the US June employment data will be the highlights later this week.

Gold stays in red near $4,050 as US-Iran clash revives inflation fears

Gold price remains in the negative territory around $4,050 in Monday's European trading. The bullion struggles as military clashes between the United States and Iran in the strategic Strait of Hormuz have revived inflation concerns, bolstering Fed rate hike expectations. However, a broad US Dollar retreat is helping limit Gold's downside.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.