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  • Fears of US sanctions on China, protests in Hong Kong weigh on risks in Asia.
  • Calls of China overcoming the virus slump, stimulus from Japan and hopes of the coronavirus (COVID-19) cure keep buyers hopeful.
  • A short data line pushes investors to look for qualitative catalysts for firm direction.

Asian equities fail to reprint the previous day’s flying colors as market players fall back upon US-China tussle amid increasing odds of the US sanctions on China. Also weighing the risk-tone sentiment could be China’s expansion of the scope of the Hong Kong security legislation and the likely protests against the same. Even so, calls of China inching out of the virus-led economic slump, as per the Bloomberg analysis, as well as the further stimulus from Japan keep the buyers hopeful.

That said, MSCI’s index of Asia-Pacific shares outside Japan drops 0.30% but Japan’s NIKKEI benefit from expectations of 117.10 trillion yen package while rising 0.65% to 21,410 by the press time. Further, Australia’s ASX benefits from upbeat Aussie Construction Work Done and China’s Industrial Profits. Moving on, New Zealand’s NZX 50 copied its Australian counterpart whereas stocks in China and the Philippines are mildly negative. Additionally, Hong Kong’s HANG SENG drops 0.64% to 23,260 due to the increasing expectations of a wide protest in the nation against China’s recent moves.

On the other hand, South Korea’s KOSPI and India’s BSE SENSEX flash small gains amid hope of further stimulus and further easing of lockdown restrictions.

It should also be noted that Wall Street cheered the calls of economic restart and nearness to the virus cut the previous day, which in turn propelled S&P 500 to cross 3,000 mark for the first time after March. Though, the risk-on sentiment fades off-late as the US 10-year Treasury yields stay depressed around 0.69%.

Given the return of the US-China tension, coupled with calls of geopolitical tension from Hong Kong, markets players may remain cautious amid a lack of major data/events on the calendar. Though, ECB President Christine Lagarde’s speech and the Fed’s Beige Book will be closely observed for fresh impetus.