Asian Stock Market: Trades in red amid cautious market mood on China concerns, Fed eyed


  • Asian stocks mostly trade in red following mixed cues from Wall Street.
  • IMF comments on China, Assurance from Evergrande on bond coupon payment stabilizes the market volatility.
  • BOJ maintains status quo on monetary policy, FOMC in focus.

Asian stocks attempt to stabilise on Wednesday after the previous two session’s sell-off. Investors remain cautious ahead of the US Fed monetary policy decision and on the concerns of the spread of the delta variant in Asia-Pacific.

MSCI’s broadest index of Asia-pacific shares outside Japan declined 0.3%.

The Asian Development Bank (ADB) slashed Asia’s Gross Domestic Product (GDP) growth at 7.1% from 7.3% it estimated in April. The region includes China, South Korea, India, Singapore while excluding Japan, Australia, and New Zealand.

The Chinese property giant Evergrande contagion risk subsides after the main unit of the group said that it would make bond interest payment on September 3 after a private negotiations with bondholders.

In addition to that, the International Monetary Fund (IMF) Chief Economist Gita Gopinath said China has sufficient tools and policy instruments to prevent Evengrande systemic crisis.

The Shanghai Composite Index declined 0.75% as traders returned from the long weekend. The PBoC left its key interest rates steady for the 17th straight month at its September fixing.

Japan’s Nikkei 225 fell 0.62% after the Bank of Japan left its key rate unchanged at -0.1%.

The ASX 200 rose 0.6% after Reserve Bank of Australia’s (RBA) meeting minutes showed that the economy will return to its pre-Delta path by mid-2022.

The US Dollar Index remains strong above 93.25% ahead of the crucial Fed Interest rate decision due later in the day.


 

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