Asian Stock Market: Trades mixed as Sino-American tension offsets stimulus, Brexit hopes
- Asian shares refrain from tracking Wall Street gains as mixed headlines from China probe the bulls.
- China bought only one-third of promised US goods through August, cites Yuan's strength as export negative.
- US House Democrats unveil plans to break the stimulus deadlock, EU also eased Brexit stance ahead of today’s key talks.
- First round of American Presidential Election debate, negotiations in Brussels will be crucial.
Asian equities fizzle upside momentum as Beijing’s failures to comply with the trade deal probe the early-day risk-on mood before the European traders kick-start Tuesday’s work. While portraying the same, the MSCI index of Asia-Pacific shares outside Japan marks 0.30% intraday gains whereas Japan’s Nikkei 225 also adds around 0.35% to 23,595 by the time of the press.
Not only the dragon nation’s failures to comply with the trade deal but comments in the China Daily, criticizing the Trump administration’s “Sinophobic policies”, also flash the risk of a trade war between the US and China. Additionally, downbeat statements from Chinese Cabinet adviser Kevin Yao also weigh on the Asia-Pacific shares. As a result, stocks in Hong Kong and New Zealand are mildly offered whereas Chinese equities seesaw with small gains/losses.
Further to note is the World Bank's forecast of Asian GDP for 2020 that highlights the coronavirus (COVID-19) pandemic as a reason for the weakest prediction in five years.
South Korea’s KOSPI cheers recovery in Industrial Output numbers with near 1.0% rise while India’s BSE Sensex and Indonesia’s IDX Composite are up 0.40% as we write.
Although downbeat comments from China weigh on the risk-tone sentiment, hopes of further stimulus from the European Central Bank (ECB) and the US government joins Brexit-positive headlines to please the market bulls.
As a result, American stock futures are near 0.50% up whereas the US 10-year Treasury yields seesaw around 0.66%. It’s worth mentioning that Wall Street benefited from a run-up in the bank shares during the previous day.
Looking forward, market players will be keen on listening to the first round US Presidential Election debate. Also up in the traders’ radar are Brexit headlines from Brussels and any comments from a slew of Fed speakers up for comments during today’s North American session.
While the early signals are positive to the risks, Brexit and the coronavirus (COVID-19) news may probe the optimists.