Asian Stock Market: Consolidates recent gains amid cautious sentiment, quiet markets

Asian stocks trim weights amid pre-NFP trading lull.
US stimulus, covid vaccine optimism fades as retail frenzy regains attention.
Aussie trade numbers, GT news conveying US support for “One China” should have added to the risks.

Anil Panchal FXStreet

Asian equities fizzle out the latest upside momentum ahead of Thursday’s European session. The risks got sold off recently as traders turn cautious ahead of this week’s key data/events, today’s BOE and Friday’s US NFP data. Also challenging the mood could be expectations of retail rush round 2.0 due to the latest steps from Robinhood.

The mood could be ascertained from MSCI’s index of Asia-Pacific shares outside Japan, currently down 0.73% intraday, as well as Japan’s Nikkie 225 that drops 0.87% to 28,400 by press time.

Australia’s ASX 200 and New Zealand’s NZX 50 follow the suit with around 0.80% losses on a day. In doing so, Australia’s upbeat Trade Balance for December and recently jumped odds of no rate cuts from the RBNZ seemed to have played a little role.

Also on the positive side was the US House Democrats’ victory in pushing President Joe Biden’s $1.9 trillion covid relief package to the Senate. Further, Global Times’ news suggesting that the US supports One-China Policy, as well as global vaccine news, play positive tunes that were mostly ignored.

The reason to blame could be Thursday’s meeting to discuss the latest market frenzy by US Treasury Secretary Janet Yellen. The fears grew after news that Robinhood, the trading terminal which played a key role in the Gamestop-led saga, increased trading limits for the embattled stocks. Furthermore, the Bank of England’s (BOE) Quarterly Inflation Report (QIR) and the monthly employment data from the US, up for publishing on Friday, also challenge the sentiment.

Even so, stocks in China trade mixed while those from Indonesia print 0.50% gains. India’s BSE Sensex is mildly offered while South Korea’s KOSPI has become the region’s biggest loser.

On a broader scale, the US 10-year Treasury yields struggle to keep the steepest run-up in seven years whereas the S&P 500 Futures reverse early-day gains to snap a three-day uptrend.

Looking forward, fresh market frenzy may weigh on sentiment but US stimulus chatters can challenge the bears’ entry.

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.

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