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  • Asian equities fail to track Wall Street’s gains as virus woes battle China’s downbeat economics.
  • Six prefectures in Japan escalate covid-led restrictions on Sunday, doubts over Olympics grow.
  • Uneven vaccinations, reflation fears and geopolitical risks also test market sentiment.
  • Fed keeps rejecting the pressure to adjust monetary policy amid mixed data.

Asian shares struggle for clear direction between Friday’s upbeat Wall Street performance and the recent mild losses of S&P 500 Futures amid a quiet Monday. In addition to the broad theme of the coronavirus (COVID-19) resurgence in Asia and inflation fears in the West, China’s April month Retail Sales and Industrial Production offer extra filters to the market moves, making it harder to portray unidirectional momentum.

That said, MSCI’s index of Asia-Pacific shares outside Japan drops 0.15% on a day while Japan’s Nikkei 225 marks 1.30% intraday loss by the press time. Further, Chinese stocks remain on the front foot, up an average +1.0%, as downbeat economics reject odds against the People’s Bank of China’s (PBOC) easy monetary policy.

Elsewhere, Australia’s ASX 200 gains 0.30% as gains from Beijing counter fears of escalating Aussie-China tussles. Though, New Zealand’s NZX 50 benefits from upbeat visitor arrivals to better copy the dragon nation’s moves.

Furthermore, Hang Seng follows China but South Korea and Indonesia remain pressured amid the covid woes at home, also due to slow vaccinations. Additionally, India’s BSE Sensex, however, prints mild gains even as covid concerns join cyclone Taute.

It’s worth mentioning that markets in the US cheered downbeat Retail Sales, Michigan Consumer Sentiment Index and Industrial Production data on Friday as the same helped the US Federal Reserve (Fed) to defend the easy money policies. Even so, the S&P 500 Futures and the US 10-year Treasury yields remain pressured, which in turn helps the US dollar index (DXY) while writing.

Moving on, market sentiment can keep following the inflation and covid headlines for fresh impulse whereas the geopolitical tussles in the Middle East can offer an extra catalyst to the traders.

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