- Asian equities nosedive as pessimism surrounding the US-China relations heavy the risks.
- RBI’s rate cut, BOJ’s aid to small and medium-sized firms couldn’t provide any relief.
- A light economic calendar will keep the focus on how the Trump administration reacts to Chinese action.
With the fears from the US-China tussle fueling the risk-off at full steam, Asian shares stand on a slippery ground ahead of Friday’s European open.
The 13th National People's Congress (NPC) turns out to be a festival for the market bears as updates from the annual even suggest escalating tension amid the world’s top two economies.
The NPC “proposed new legislation for Hong Kong requires the territory to quickly finish enacting national security regulations under its mini-constitution,” said Reuters. While the US earlier uttered its wish to see Hong Kong free from Chinese influence, Senate Majority Leader McConnell said, “further China crackdown on Hong Kong will intensify the interest in re-examining the US-China relationship.”
Also terrifying the investors were direct threats from the NPC’s Vice Chairman Wang Chen as well as the Asian major’s dropping of GDP target for 2020, citing the coronavirus (COVID-19) pandemic.
On a positive side, the NPC showed readiness to implement the trade deal with the US. Additionally, the RBI’s rate cut and the BOJ’s stimulus also tried to cheer their respective locals amid the virus woes but failed.
That said, the US 10-year Treasury yields drop 3.4 basis points to 0.643% whereas MSCI’s index of Asia-Pacific shares outside Japan mark over 2.5% loss by the press time. Further, Japan’s NIKKEI drops over 1.0% to 20,325 and India’s BSE SENSEX joins the league with a 1.36% loss to 30,515. Additionally, Australia’s ASX slips 1.0% but the major attention is on 5.8% red figures on Hong Kong’s HANG SENG that drops to 22,870 as we write.
Considering the recent wave of risk aversion, coupled with a light calendar, stocks might keep eyes on the US-China story for fresh direction.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.