Asian Stock Market: Tracks S&P 500 Futures to rebound from yearly low

• Asian equities follow US stock futures, yields amid sluggish day.
• Cautious optimism favor traders to lick their wounds.
• Fed’s Powell pushes for faster tapering, Omicron concerns loom.
• German Retail Sales, US PMI, ADP Employment Change will be important.

Asian traders manage to kick-start December on a positive note, after testing the yearly bottom the previous day, as markets await more signals over the Fed’s next step and the South African variant of the coronavirus.

That said, the MSCI’s index of Asia-Pacific shares outside Japan posts over 1.0% gains after dropping to the lowest level since November 2020 on Tuesday whereas Japan’s Nikkei 225 rises 0.85% heading into Wednesday’s European session.

It’s worth noting that the US Treasury yields gained fresh life after Fed Chair Jerome Powell suggested the risk of more persistent inflation and teased faster taper in the December meeting. While firmer yields weighed on the Wall Street benchmarks, US stock futures rise as optimism surrounding China helped Asia-Pacific traders.

It should be noted, however, that the traders remain cautious amid mixed concerns over the South African strain of the COVID-19, dubbed as Omicron, as well as ahead of the key US data and Fed Chair Powell’s second round of testimony.  Moderna’s Chief Stéphane Bancel raised concerns over the prevailing vaccines’ incapacity to tame Omicron but representatives of Pfizer and Oxford marked the absence of facts to tame the bears. It should be observed that the US Food and Drug Administration’s (FDA) emergency use authorization of an antiviral pill from Merck and Ridgeback Biotherapeutics, which in turn should have favored bulls.

Amid these plays, Chinese equities cheer comments from Vice Premier Liu He expecting a strong 2021 even as Caixin Manufacturing PMI dropped to three-month low. Further, Australia’s ASX 200 eases despite Q3 GDP came in better-than-forecast while New Zealand’s NZX 50 track stocks from Beijing to print mild gains but Indonesia’s IDX Composite drop 0.10% amid firmer inflation data.

South Korea’s KOSPI rises over 2.0% amid firmer factory activity whereas India’s BSE Sensex remains firm after fiscal Q2 GDP matches 8.4% forecast.

Looking forward, covid updates and the Fedspeak will be more important while German Retail Sales, US ISM PMI and ADP Employment Change can provide additional details for clear direction.

Read: Yields rebound on Fed, Omicron fears, US ISM PMI, ADP data eyed