- Stocks in Asia remain pressured as the pandemic fears weigh investor sentiment.
- The US-China tension over Hong Kong and Xinjing recently gained attention.
- PBOC announced rate cut, ADB slashes growth forecasts for China.
- Aussie employment, New Zealand’s GDP flashed downbeat figures.
Asian equities continue to bear the burden of the coronavirus (COVID-19) fears amid escalating numbers from various US states. The underlying pessimism is strong enough to rule out US President Donald Trump’s signal for a cure to the pandemic. The reason being additional worries concerning the US-China tussle after diplomat from Beijing warned US Secretary of State Mike Pompeo to not interfere in Hong Kong and Xinjiang issues.
Earlier during the day, the People’s Bank of China (PBOC) cut 14-day reverse repo while trying to combat the virus. Elsewhere, the Asian Development Bank (ADB) cut developing Asia’s GDP forecasts for 2020 from 2.2% to 0.1%. The institute also slashed China’s growth predictions from 2.3% to 1.8% while expecting a recovery by 7.4% in 2021.
On the data front, Australia’s May month employment figures came in weaker than anticipated with the headline Unemployment Rate rising past-7.0% expected to 7.1%. Elsewhere, New Zealand’s first quarter (Q1) GDP shrank 1.6% versus -1.0% market consensuses.
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan mark 0.06% gains with Japan’s Nikkei declining 0.40% to 22,373 by the press time of the pre-European session on Thursday. Australian’s ASX 200 loses 0.55% to 5,958 but New Zealand’s NZX 50 surpasses all by being down 1.3% to 340.25. Further, shares in China and Hong Kong remain mostly directionless and so does equities from South Korea, Indonesia and India. Other than the already mentioned catalysts, the India-China tussle and tension among the North and South of Korea also sour the trading sentiment in Asia.
Looking at the broader perspective, the US 10-year Treasury yields drop two basis points to revisit 0.70% while the US stock futures remain on the back foot as we write.
As a slew of updates concerning the US-China and the India-China issues, not to forget the pandemic news, are crossing wires off-late, a lack of major data/events could push traders towards qualitative catalysts.
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