Asian stock market: Risk reset favors Nikkei 225, ASX 200 to reverse early-day losses
- Global markets pause the previous risk-off sentiment amid mildly positive news concerning China.
- Latest virus figures, US President Donald Trump’s refrain from further sanction probe the bears.
- PBOC announced no rate cuts, the US pushes for peace in Libya.
- Bulls await clarity as broad play remains elusive amid rising US numbers, Beijing’s suspension of US poultry imports.
Stocks in Asia recover amid hopes of receding tension between the US and China. The latest coronavirus (COVID-19) statistics from the dragon nation also favor the risk reset. However, certain factors still favor the escalation of the Sino-American tension while the US virus figures keep the wave 2.0 fears alive.
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan gain 0.50% whereas Japan’s Nikkei 225 overcome the initial 0.50% loss to -0.05% as taking rounds to 22,490. Further to portray the improvement in trading sentiment, Australia’s ASX 200 also prints 0.10% gains to 5,950 as we write.
Elsewhere stocks in China also cheer the risk-positive signs despite the People’s Bank of China’s (PBOC) refrain from rate cuts. Furthermore, the US 10-year Treasury yields stay sluggish around 0.70% but the US stock futures fill the early-Asian session gap-down with over 0.30% gains.
Even so, Indonesia’s IDX, Hong Kong’s Hang Seng and South Korea’s KOSPI are still seeing the red amid geopolitical and/or virus fears at home.
Although the recent risk recovery helps the Asian markets, broad pessimism can’t be ruled out as the pandemic statistics from the southern US states, Germany and France remain downbeat. Additionally, China’s turning down of the American meat from Tyson and US Secretary of State Mike Pompeo’s discussion with allies about action on China keeps the risk-tone sentiment chained.
Given the lack of major data/events on the economic calendar, traders will keep eyes on the geopolitical, virus updates for fresh impulse.