Asian Stock Market: Grinds lower on sluggish US bonds, China worries

Asian shares hold lower ground amid jittery markets before the key testimony by Fed Chair Powell, US Treasury Secretary Yellen.
Western alliance joins hands to combat China’s alleged human rights violation, Beijing fights back.
Germany unveils fears of virus resurgence, Powell–Yellen sound cautiously optimistic.
New Zealand announces measures to control housing market, Australia bears the burden of floods.

Asian equities remain depressed as regional leader China battles the Western pressure. Also challenging the sentiment is the cautious mood ahead of a prime-time appearance by US Fed Chair Jerome Powell and Treasury Secretary Janet Yellen in front of Congress.

America, Europe, Canada and the UK join hands to voice against China’s human rights violation in Xinjiang. The European Union (EU) goes a step farther and sanctions 10 diplomats from Beijing, to which the dragon nation responds with hints of summoning the EU ambassador to protest the punitive measures.

Challenges to the People’s Bank of China’s (PBOC) easy money policy and hopes of a strong economy are extra filters to the risks that weigh on Chinese markets and exert downside pressure on major Asia bourses. While portraying the same, MSCI’s index of Asia-Pacific shares outside Japan drops 0.40% whereas Japan’s Nikkei 225 declines 0.15% during the early Tuesday.

Stocks in New Zealand buck the trend amid the government’s heavy measures to tame the housing market bubble, however, Australia’s ASX 200 struggles for a clear direction amid a flood in New South Wales and easy Treasury yields. Elsewhere, Indonesia’s IDX Composite prints 0.20% intraday losses while Indian’s BSE Sensex prints mild gains on mixed clues.

Read: S&P 500 Futures track US Treasury yields to south ahead of Powell–Yellen duet

Finally, the coronavirus (COVID-19) resurgence and the vaccine jitters are extra catalysts that traders will need to follow in addition to the US congressional testimony. Given the hopes of upbeat statements from top-line US policymakers, any disappointment or hints of reflation can weigh on the market’s mood more than feared.

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