- Asia-Pacific shares drift lower amid a sluggish session.
- Hopes of faster tapering, Fed rate hike battles Omicron woes to challenge momentum traders.
- China Retail Sales, Industrial Production flashed mixed signals, Beijing-linked financial risks loom.
- Yields fade bounce off weekly low, US stock futures remain sidelined.
Asian equities remain lackluster, mostly downbeat, during early Wednesday morning in Europe as markets brace for the key Federal Open Market Committee (FOMC).
That said, the MSCI’s index of Asia ex-Japan drops 0.11% whereas Japan’s Nikkei 225 prints 0.05% intraday gains by the press time.
Fears of the Fed’s end to bond purchase, followed by a rate hike, join the Omicron woes to challenge the equity buyers. However, the US passage of a bill to raise the debt limits and President Joe Biden’s push for getting his Build Back Better (BBB) plan through the House in 2021 keep buyers hopeful. Additionally, Pfizer’s announcements concerning the efficacy of its vaccines and medicines over the South African covid variant, dubbed as Omicron, also defend the bulls.
It’s worth noting that escalating fears over China’s financial markets and mixed data at home, weigh on the stocks from Beijing. On the same line is the news that the US House passes Uyghur Bill aimed at China.
Drowning with Chinese securities are stocks from Australia, New Zealand and Hong Kong. On the same line is India’s BSE Sensex and South Korea’s KOSPI. It should be observed that the record covid cases in South Korea, per Reuters, offer additional downside pressure on the KOSPI.
On the contrary, markets in Indonesia print mild gains amid receding trade balance whereas the Bank of Japan’s liquidity infusion and a lack of major negatives concerning the virus seem to help stocks from Tokyo to remain firm.
On a broader front, the US Treasury yields and the S&P 500 Futures remain sluggish while the Wall Street benchmarks closed negative the previous day.
Moving on, the Fed’s action will be crucial for near-term market directions as equity bears have high hopes from the Fed hawks.
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