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Asian Stock Market: Cautious at best as PBOC inaction joins Japan’s off, Ukraine woes

  • Asia-Pacific markets drift lower as geopolitical fears escalate in Ukraine, China reports record covid infections.
  • PBOC’s status-quo, holiday in Japan defend bulls amid sluggish start to the key week.
  • Multiple diplomatic meetings, central bank comments and PMIs to offer active sessions ahead.

Given the escalation in the Russia-Ukraine crisis joining geopolitical risks from Saudi Arabia and COVID-19 fears from China, risk appetite remains sour during Monday’s Asian session. It should be noted, however, that an off in Japan and no monetary policy change by the People’s Bank of China (PBOC) restricts the market moves of late.

Adding to the trading barrier is the cautious sentiment ahead of US President Joe Biden’s call with the leaders of Europe and the UK, as well as comments from the European Central Bank (ECB) President Christine Lagarde and Fed Chairman Jerome Powell.

While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan drops 0.30%. It’s worth noting that stocks in China remain mildly offered as the dragon nation prints record daily coronavirus infections and Evergrande suspends trading in Hong Kong.

Hong Kong’s Hang Seng and India’s BSE Sensex track China while flashing nearly 0.30% intraday loss while Australia’s ASX 200 remain indecisive as Australian Prime Minister Morris Scott hints at budget measures to battle fuel prices. Further, New Zealand’s NZX 50 rise 0.30% as a record trade deficit on YoY hints at RBNZ’s slower normalization, as well as chatters over removing virus-led activity measures.

It should be noted that firmer oil prices also weigh on the Asia-Pacific shares but cautious sentiment ahead of the day’s key events restrict the moves.

On a broader front, the S&P 500 Futures drops 0.28% intraday whereas the US Dollar Index (DXY) pare recent losses while the gold print mild gains at the latest.

Moving on, speech from European Central Bank (ECB) President Christine Lagarde and Fed Chairman Jerome Powell, as well as US President Joe Biden’s cal with the leaders of France, Germany, Italy and the UK will be important for the markets to watch.

Read: S&P 500 Futures, US T-bond yields seesaw as Ukraine-Russia fears grow over Mariupol

Author

Anil Panchal

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.

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