Asian Stock Market: Tracks S&P 500 Futures to north amid receding inflation jitters

Asian equities track their global counterparts as Fed tries to placate bears.
Japan leads the run-up, New Zealand bucks the trend.
Mixed covid updates, geopolitical fears and light calendar test the bulls.
US Retail Sales, virus news and US central bankers’ reaction become the key.

Anil Panchal FXStreet

Friday so far turns out to be a good day for the Asian traders as regional markets rebound ahead of the European session. Among them, Japan’s Nikkei takes the front seat with over 2.0% gains but New Zealand is an odd one in the lot, despite mild losses.

A 14-month low US Jobless Claims joined the Federal Reserve (Fed) officials’ push for multiple months and more data to assent the reflation fears to help the Wall Street benchmarks print the first positive day of the week on Thursday. The moves gained extra support from the US Centers for Disease Control and Prevention (CDC) mandate suggesting no mask requirement for fully vaccinated people.

However, fears that Japan is up for imposing tougher activity restrictions and include more prefectures to battle the coronavirus (COVID-19), coupled with the fears of Indian covid strain, probed the mood earlier in Asia. Also on the risk-negative side were the geopolitical woes in the Middle East as well as the pre-US data caution amid a light calendar in Asia.

Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan follows S&P 500 Futures while flashing above 0.50% intraday gains by the press time. Further, markets in Australia, Hong Kong, Taiwan and South Korea remained nearly 1.0% up whereas shares in China grew around 1.5% on average.

It’s worth mentioning that New Zealand’s NZX 50 drops 1.14% while writing as odds of the RBNZ rate hikes in May 2020 jumps to nearly 70%. Additionally, Indian markets remain jittery, mildly bid of late, as the government’s claims of covid recovery gain a few accolades.

Amid a light calendar, traders await the US Retail Sales for April, as well as the preliminary readings of the Michigan Consumer Sentiment Index for May.

Read: S&P 500 Futures keep gains above 4,100, US Retail Sales eyed

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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