Asian Stock Market: Risk catalysts supersede upbeat data, China tension renews

• Asian shares trade mixed even as data from Japan, Australia and South Korea flash welcome results.
• China’s warning to Taiwan, Gamestop saga and the vaccine developments weigh on risks.
• Hopes of US fiscal stimulus, light calendar and market consolidation probe the bears.

Equities in Asia-Pacific drift on early Friday as market players struggle to overcome macro pessimism driven by fears of global economic weakness, trading restrictions and China’s fresh tussle with the West. In doing so, the risks ignore welcome prints of the second-tier data from Japan, Australia and South Korea.

While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan marks 0.20% intraday gains whereas Japan’s Nikkei 225 drops over 1.00% to 27,900 by press time.

Australia’s ASX 200 can’s cheer better-than-expected Producer Price Index for the fourth quarter (Q4) amid fears of the fresh US-China jitters as Beijing warns Taiwan of a war. The same goes with New Zealand’s NZX 50 that drops 0.10% even as Finance Minister Grant Robertson praised the country’s fundamentals as it overcomes the coronavirus (COVID-19).  Furthermore, South Korea’s KOSPI declines 1.68% although Industrial Production for December crossed previous readings.

Others in the region like Indonesia’s IDX Composite followed the trend with over 1.0% losses while stocks in China and Hong Kong print mild gains, despite losing a bit off-late, amid hopes of further easy money at home and also from the US. India’s BSE Sensex is also the odd one out with around 0.50% gains as traders remain hopeful ahead of the Indian Government budget and the recent shift in farmers’ agitation.

Other than the regional catalysts, the restrictions over the retail trading of stocks like Gamestop and chatters surrounding the further development of US fiscal stimulus in the Senate also affect the mood in Asia.

It should be noted that the S&P 500 Futures mark near 1.0% losses while the US 10-year Treasury yields drop around one basis point to 1.05% by the time of the press.

Looking forward, a light calendar requires market players to keep searching for the risk catalysts for fresh impulse.