- Asian shares fails to extend Wednesday’s upside momentum as virus woes get serious.
- RBNZ sounds cautiously optimistic, China bans Victorian timber logs.
- The US keeps bias over Hong Kong Security Bill, indirectly warns Beijing.
Equities in Asia fade early optimism as fears of wide coronavirus (COVID-19) wave 2.0 joined news from the Reserve Bank of New Zealand (RBNZ) and China. While portraying this, MSCI’s index of Asia-Pacific shares outside Japan rises 0.15% but Japan’s Nikkei 225 struggles for a clear direction below 25,400, currently up 0.07% near 25,370, ahead of Thursday’s European session.
RBNZ Assistant Governor Christian Hawkesby rekindled the growth outlook covered the previous day by Governor Adrian Orr. The policymaker additionally turned down the need for further stimulus while ruling out negative rates at least until March 2021. This weighed on the NZX 50 that drops 0.10% by press time.
Australia’s ASX 200 declines over 0.50% to 6,414 as China announced an indefinite ban on Victorian timber logs. Additionally, US National Security Adviser Robert O’Brien’s indirect warning to China, over the Hong Kong Security Bill, also weighs on the Aussie risk barometer. On the contrary, Chinese stocks dwindle amid a pullback in technology shares and fears of a fresh Sino-American tussle, not to forget the Aussie-China tension.
It’s worth mentioning that South Korea’s KOSPI has an additional burden, in the form of Import-Export Price Growth figures, whereas Indonesia’s IDX Composite couldn’t cheer the Aussie lending to combat the covid. Additionally, India’s BSE Sensex and Hong Kong’s are among other mild losers.
Other than Asian stocks, US futures and Treasury yields are also weak as the pandemic is firming the grip in America. The mood defies the vaccine hopes as well as the return of the US traders.
With the active calendar and speeches from a few more central bankers, Thursday will be an interesting day of the week. Though, traders should be cautious before turning optimistic.
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