Asian stock market: Losses at China, New Zealand probe run-up to seven month high

• MSCI’s index of Asia-Pacific shares, ex-Japan, surge to the highest since January despite notable losses from Beijing and Auckland.
• Virus woes, trade wars join the second-tier geopolitical threats to challenge the bulls cheering S&P 500’s rally to record high.
• Mixed economics from New Zealand, Japan and Australia also fail to disappoint the optimists eyeing US stimulus.

Asian shares jump to the early-2020 high during the pre-European session on Wednesday. While portraying the same, MSCI’s gauge of Asia-Pacific equities outside Japan gain 0.10% and probe the January month high while rising for the third day in a row. On the other hand, Japan’s Nikkei 225 also gains 0.20% even as the Asian major’s trade numbers for July contrast Machinery Orders.

Moving on, Australia’s ASX 200 ignores soft Westpac Leading Index and threats from China as comments from Aussie PM Scott Morrison suggest no trade war with China. The same can’t be true for New Zealand’s NZX 50 that drops over 1.0% amid rising coronavirus (COVID-19) numbers although PM Jacinda Ardern defies any such expectations. On the same line, Chinese equities remain on the back foot as market players prefer US stocks as American President Donald Trump keeps disliking China and suggest no talks for now. Additionally, US House Speaker Nancy Pelosi shows readiness to break the stimulus deadlock, which in turn triggers profit-booking from Chinese blue-chips.

Elsewhere, a typhoon in Hong Kong stops trading till noon in Asia whereas an earthquake in Indonesia weighs on IDX Composite as it drops 0.30% by the press time. Even so, South Korea’s KOSPI and India’s BSE Sensex print mild gains to respect overall bullish momentum.

It’s worth mentioning that the S&P 500 Futures rise 0.12% after its Wall Street benchmark refreshed record the previous day. Though, the same can’t be true for the US 10-year Treasury yields as they extend weakness below 0.70%, currently down one basis point to 0.659%, as we write.

Given the lack of major data/events up for publishing ahead of the US FOMC minutes, traders will have to keep eyes on the risk catalysts comprising COVID-19, trade war and American relief package for fresh impetus.