- Asian equities remain pressured as virus concerns, relfation fears.
- Markets in Hong Kong, Japan, Philippines portray losses above 1.0%.
- Australia extends local lockdown, China conveyed economic fears with investment plans.
Asia-Pacific shares begin the week on a back foot as the coronavirus Delta variant spread economic woes, as well as the fears of reflation emanating from the West. That said, MSCI’s index of Asia-Pacific shares outside Japan drops 1.20% heading into the European session whereas Japan’s Nikkei 225 drops 1.7% by the press time.
Tokyo marks the fifth consecutive day of over 1,000 infections whereas the UK reports the highest daily cases since January. Further, Australia, Indonesia and South Korea show readiness to extend local lockdowns while New Zealand witnesses three local cases, the first in many days, as a mark of fresh virus woes.
In addition to the covid variant fears, hopes of the monetary policy adjustments in the US also weigh on the market sentiment. As details of Friday’s consumer-centric data portray higher inflation expectations, market players increase bullish bets on the US Dollar Index (DXY) the most in over a year, per the Financial Times (FT), which in turn weigh on equities. Elsewhere, China’s State Planner sounds worried despite conveying heavy investment plans.
Against this backdrop, Australia’s ASX 200 drops 0.75% whereas Hong Kong’s Hand Seng and the Philippines’ PSEi Composite declines by over 1.5% by the time of the press. Additionally, stocks from China and South Korea lose around 1.0% but those from Indonesia and India are down 0.70%.
It should, however, be noted that New Zealand’s NZX 50 losses the least amid economic optimism at Auckland despite witnessing fresh infection at home.
Amid these plays, S&P 500 Futures drop half a percent whereas the US 10-year Treasury yield remains pressured for the third consecutive day. Moving on, oil prices remain pressured on OPEC+ news whereas gold seeks clear direction but stays depressed above $1,800.
Looking forward, a light calendar and the covid woes can keep investor sentiment sour and back the safe-havens like the US dollar.
Read: S&P 500 Futures drop half a percent amid Delta variant concerns
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