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Asian Stock Market: Traders struggle to cheer China, IMF news, softer Oil price amid mixed details

  • Asia-Pacific equities trade mixed, grinding lower of late as traders remain cautious ahead of top-tier data/events.
  • Upbeat China PMI, IMF growth forecasts join Covid-linked headlines to underpin bullish bias.
  • Mixed concerns surrounding China, due to downbeat Industrial Profits, sour sentiment in India and hawkish BoJ talks probe equity buyers.
  • S&P 500 Futures hesitate in extending Wall Street’s losses amid hopes of economic rebound.

Markets in Asia fail to cheer the upbeat signals from China and the International Monetary Fund (IMF) as sentiment remains cautious ahead of the top-tier data and central bank meetings. Adding strength to the market’s anxiety could be the recently firmer US data and looming economic fears surrounding Asia.

Amid these plays, the MSCI’s index of Asia-Pacific shares outside Japan traces Wall Street’s losses while posting 1.20% daily downside whereas Japan’s Nikkei 225 drops 0.25% to 27,375 by the press time. In doing so, the Japanese shares can’t cheer mostly upbeat data from Tokyo, as well as risk-positive news surrounding the coronavirus and the emerging market growth amid fears of hawkish moves of the Bank of Japan (BoJ).

Japan’s Unemployment Rate remains unchanged near 2.5% in December but the Retail Trade rose past 0.5% in market forecasts to 1.1% during the stated month. On the same line, the Industrial Production also crossed -1.2% consensus with -0.1% figure for December.

On the other hand, Chinese equities grind higher as the headline NBS Manufacturing PMI rose to 50.1 versus 49.7 market forecasts and 47.0 prior whereas Non-Manufacturing PMI also came in upbeat with 54.4 figure compared to 51.0 expected and 41.6 previous readings. Even so, the nation’s Industrial Profits contract in 2022.

Elsewhere, the International Monetary Fund (IMF) recently raised its global growth estimates while saying that the emerging markets' growth slowdown bottomed out in 2022. The global lender also stated that estimates come with the backdrop of a slight increase in the 2023 global growth outlook helped by "surprisingly resilient" demand in the United States and Europe, an easing of energy costs and the reopening of China's economy after Beijing abandoned its strict COVID-19 restrictions. It’s worth mentioning that the IMF’s fears over inflation seem to weigh on the market sentiment.

Earlier favoring the risk profile could be the news suggesting US President Joe Biden’s administration’s readiness to revoke the Covid-led emergencies from May 11 appeared to have favored the risk-on profile of late. On Monday, China’s Center for Disease Control and Prevention (CDC) said, reported by Reuters, “China's current wave of COVID-19 infections is nearing an end, and there was no significant rebound in cases during the Lunar New Year holiday.”

Other than the risk catalysts, downbeat Oil prices also put a floor under the Asia-Pacific equities. That said, the WTI crude oil prints a three-day downtrend near $78.00 by the press time. On the same line could be mildly offered US equities and S&P 500 Futures.

Alternatively, fears of equity rout in India due to Adani Enterprise fiasco and hopes of slowest growth in three years seem to exert downside pressure on the Indian equities. Furthermore, downbeat Aussie Retail Sales and fears of China growth keep equities in Australia and New Zealand sidelined.

Moving on, traders in the Asia-Pacific region will pay close attention to India’s Union Budget for the Fiscal Year 2023-24 and New Zealand quarterly employment data for immediate directions. However, the Fed’s verdict is the key for clear guide.

Author

Anil Panchal

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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