Asian Stock Market: China steadies after $1.3 trillion equity rout, Biden tries to appease bulls


  • Asian equities trade mixed as economic recovery hopes fail to extend the previous day’s stimulus-backed rally.
  • Markets in China stabilize despite early warning of the Sino-American and Canberra-Beijing tussles.
  • Vaccine news, Treasury moves keep traders confused amid a light calendar.

Asian shares dribble near the multi-day top on early Friday as markets couldn’t cheer US President Biden’s first prime-time appearance amid a potential “sell the fact” trade. Also probing the mood could be mixed vaccine updates and likely geopolitical tension concerning China. Even so, MSCI’s index of Asia-Pacific shares outside Japan prints 0.27% intraday gains whereas Japan’s Nikkei 225 gains over 1.0% amid hopes of further stimulus from the Bank of Japan.

Australia’s ASX 200 rises 0.75% even as Aussie Foreign Minister Marise Payne raised concerns about China’s moves to control Hong Kong politics. Further, markets in New Zealand gained extra support, other than the broad risk-on mood, as the International Monetary Fund (IMF) praised the nation’s covid battle while suggesting a continuation of the stimulus.

On the other hand, Chinese markets print mild losses to buck the trend as traders are yet to overcome the $1.3 trillion stock exhaustion backed by state efforts to tame the bears. Hong Kong’s Hang Sang is on the same side, with 0.20% intraday declines, but markets in Indonesia, South Korea and India seem to follow the trend of printing minor gains by the press time.

It should be noted that US President Joe Biden’s indirect hints of $2.5 trillion infrastructure stimulus couldn’t lure the bears are vaccine optimism fades. Although updates from the Novavax suggest a cure to the UK’s virus variants, global problems concerning AstraZeneca vaccines and the firm’s concerns over jab delivery to the European Union (EU) probe the risks.

Amid these plays, S&P 500 Futures waver around the all-time high marked the previous month whereas the US 10-year Treasury yields stay strong, up 1.9 basis points (bps) to 1.55%, by press time.

Looking forward, global investors will keep their eyes on the risk catalysts, mainly relating to the vaccine and stimulus, for fresh impulse. On the economic calendar, the UK’s data dump and US Michigan Consumer Sentiment Index will be the key to watch.

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