Asian stock market: Struggles to cheer Powell’s remarks amid US-Sino tension
- Asian equities search for firm direction amid mixed catalysts.
- US-China tussle intensifies with words like “super-duper missile” and “nuclear” fueling the fears of war.
- US President Donald Trump keeps alleging China for virus outbreak, suggests recovery at home.
- Fed’s Powell expects “steady recovery”, pours cold water on hopes of negative Fed rate.
With the differences between the US and China stepping up to a new level, Asian shares fail to cheer upbeat comments from the Fed Chair Jerome Powell during the pre-European session on Monday. While portraying the mood, MSCI’s index of Asia-Pacific shares, ex-Japan, register 0.05% losses whereas Japan’s NIKKEI gains 0.45% amid a lesser than expected fall in Japan’s Q1 preliminary GDP for 2020.
In a response to the US allegations for the coronavirus (COVID-19) outbreak, also the preparations to outpace military rivals including Russia and China, the Global Times Editor Hu Xijin tweeted to call on China to expand the number of nuclear warheads & enhance nuclear deterrence. Also spreading the fears could be US President Donald Trump’s warning to cut ties with Beijing.
On the positive side, US President Trump praised the recovery in the virus numbers across the nation, which in turn rekindles the hopes of the economic restart.
Further, US Fed Chair Jerome Powell repeated his weekend comments over the US TV interview “60 Minutes”, suggesting the “steady recovery” in the US during the second half of 2020 and turning down negative rates. Though, fears of high unemployment rates and readiness to use unconventional tools keep the risk-off sentiment on the cards.
That said, the US 10-year Treasury yields stay mildly positive around 0.64% whereas the US stock futures rise over 1.0% by the press time. Though, stocks in China languish around 0.50% gains whereas those from India keep losses over 2.0% amid extended lockdown and disappointment from the government’s 20 trillion rupee aid package.
Moving on, Australia’s ASX 200 gain over 1.2% while New Zealand’s NZX 50 seesaw around 0.50% in green as we write. Moving on, Indonesia’s IDX Composite and South Korea’s KOSPI seem to cheer increasing odds of the economy’s restart with mild gains.