Asian stocks ignore China inflation data to track Wall Street’s slump

Asian equities portray bears’ dominance as coronavirus (COVID-19)-led pessimism extends the previous day’s heavy risk-aversion ahead of Wednesday’s European session.

Although AstraZeneca termed its pause of vaccine trials as “routine”, market players fear the delay of the pandemic’s cure. On the other hand, China flashed better than the previous Producer Price Index (PPI) to suggest price recovery in the world’s biggest industrial player.

Read: China's August CPI showing continuing modest inflationary pressures, 2.4%

Elsewhere, the South Korean Finance Minister showed readiness to announce emergency stimulus as the nation’s Unemployment Rate dropped from 4.2% to 3.2% in August. Furthermore, Bank Indonesia (BI) intervened in the market while trying to tame the USD/IDR surge.

Against this backdrop, the MSCI index of Asia-Pacific shares outside Japan drops 0.80% while Japan’s Nikkei 225 declines 1.0% by the press time. Shares in Australia and New Zealand are down near 2.20% and 1.60% whereas South Korea’s KOSPI and Indonesia’s IDX Composite stay sluggish with 1.25% and 0.60% losses respectively.

Furthermore, Chinese equities are down more than 1.0% but the losses are slightly lesser in Hong Kong and India. Even so, the traders aren’t relieved of fears while S&P 500 Futures mark small gains and bounce off the one-month low.

On Tuesday, the market’s risk-tone remained heavy as US President Donald Trump promised to “stand tough on China” and the UK threatened to alter the Brexit Withdrawal Agreement Bill (WAB), also due to the American policymakers’ disagreements over the aid package. While portraying the same, Wall Street benchmarks dropped heavily with losses mounted in the technology and automobile sector.

Read: Wall Street Close: NASDAQ in official correction territory, S&P 500 extends Thur's decline

Looking forward, traders may now pay close attention to the risk catalysts as none of the major challenges are anticipated to recede soon whereas fears of inflation slowdown in the US are gradually picking up, which in turn can magnify the current pessimism.