Asian Stock Market: Bulls trace Wall Street gains with eyes on Jackson Hole

Markets in the Asia-Pacific region remain firmer, despite the downside of US stock futures, as bulls expect downbeat verdicts from the global central bankers as they brace for Jackson Hole speeches on Friday. In doing so, the investors track Wall Street players ahead of the key data/events.

While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan renews weekly top, up 2.34% while Japan’s Nikkei 225 rises near 0.70% intraday to 28,680 by the press time.

Further, Australia’s ASX 200 adds 1.0% but equities in New Zealand are tepid as the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr sounds cautious. RBNZ Governor Orr initially mentioned that we think there will be at least another two rate hikes. The policymaker also said, “Our core view is we won't see a technical recession.” However, his comments like, “Central banks may need to push towards zero growth,” seemed to have weighed on the sentiment in Auckland.

Shanghai Composite Index advanced 0.1% to 3,250.10 while others in China are also printing mild gains as stimulus-inspired optimism battles geopolitical and covid woes. A covid-led lockdown near China’s Beijing joined the US suspension of 26 Chinese carrier flights in response to Beijing’s action to weigh on the risk appetite. Also, Taiwan’s increased military budget, a jump in the number of US diplomats visiting Taipei and US President Joe Biden’s hard stand on Iran’s position in Syria appears to have exerted additional downside pressure on the market sentiment.

Elsewhere, South Korea’s KOSPI rises 0.30% but Indonesia’s IDX Composite bucks the trend with mild losses at the latest. Furthermore, India’s BSE Sensex adds around 0.70% intraday amid upbeat performance at home.

On a broader front, the S&P 500 Futures part ways from Wall Street’s gains and print mild losses around 4,195. Additionally portraying the risk-off mood is the two basis points (bps) of an increase in the US 10-year Treasury yields, at 3.045% by the press time.

It should be noted that WTI crude oil reverses the previous day’s pullback as it rises to $93.20 at the latest. Fresh tensions between the US and Iran, as well as China’s stimulus, seem to have favored the oil buyers. However, OPEC+ hint of more output, covid woes in Beijing and recession fears challenge the quote’s further upside.

Looking forward, traders seek clarity of the major central bank’s next move, led by the US Federal Reserve (Fed), which in turn highlights Fed Chair Powell’s speech at the Jackson Hole and the US Core Personal Consumption Expenditure (PCE) Price Index for July, the Fed’s preferred inflation gauge. Forecasts suggest that the YoY print is to ease to 4.7% from 4.8% while the monthly figures may drop to 0.3% while 0.6% prior.

Also read: S&P 500 Futures retreat, yields recover as Jackson Hole begins