Asian stock market: Nikkei 225, ASX 200 gain over 1.0%, China bucks the trend

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  • Asian shares, ex-Beijing, cheer hopes of coronavirus vaccine.
  • US President Trump signed an executive order in response to Hong Kong security law, China to implement sanctions on American policymakers.
  • BOJ held status-quo with mixed signals from the quarterly report.

Asian equities track Wall Street’s gains as nearness to the coronavirus (COVID-19) cure pleases the bulls. Market sentiment turned positive after Moderna cited upbeat results of its third round of vaccine tests. The mood got an extra boost as US President Donald Trump said the COVID-19 vaccine will be out soon.

While cheering the optimism surrounding the virus vaccine, traders paid a little heed to the US-China tussle. American President Trump signed an executive order to defy Hong Kong’s special trading status, which in turn was reflected by Beijing’s readiness to sanction US diplomats. On Tuesday, the world’s two largest economies had arguments over the South China Sea.

Also challenging the risk-tone could be downbeat comments from New Zealand PM Jacinda Ardern and Australia’s Chief Health Officer Professor Brett Sutton.

Elsewhere, the Bank of Japan held its monetary policy unchanged. However, the Japanese central bank did cite economic fears in its second quarter (Q2) Outlook Report while anticipating a recovery in GDP during the later part of the year.

Against this backdrop, the MSCI index of Asia-Pacific shares outside Japan gain 0.10% while Japan’s Nikkei 225 rises 1.56% to 22,945 while heading into the European session on Wednesday. Australia’s ASX 200 and New Zealand’s NZX 50 both ignore virus woes with 1.75% and 1.20% gains respectively. However, stocks in China snap the recent run-up as the Sino-American tension gets heated. Additionally, Indonesia’s IDX rise 0.12% to 5,085 after trade numbers whereas South Korea’s KOSPI gains extra positives with weaker than anticipated 4.5% Unemployment rate.

Indian equity bulls are also cheering the globally upbeat sentiment despite worrisome virus numbers and growing angst against the government at home.

Moving on, market players now await BOJ Governor Haruhiko Kuroda’s speech while keeping eyes on the risk catalysts for immediate direction.

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