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  • Asian equities dwindle as virus woes, Sino-American tension weigh optimism triggered through Chinese stocks.
  • RBA maintains status-quo, cites economies fears, NZIER Economist sounds cautiously optimistic.
  • Fed’s Bostic joins bears, EU-US trade tussle to intensify.
  • A light calendar keeps qualitative catalysts in the driver’s seat.

Asian shares fail to portray any clear direction of the market sentiment during the pre-European session on Tuesday. The reason could be traced from the traders’ trouble in comparing gains of Chinese equities to that of fears of the coronavirus (COVID-19) and the trade/political tussle between the world’s top two economies. Also challenging the risk-on mood could be the European Union’s (EU) trade warning to the US and the mixed signals from the Reserve Bank of Australia (RBA) and the New Zealand Institute of Economic Research (NZIER).

Stocks in China stretch Monday’s up-moves with over 2.0% gains amid hopes of further stimulus and the Global Times (GT) headlines suggesting Beijing-backed vaccine’s third trial in Brazil. Also supporting the move could be a zero virus number from the Chinese capital, the lowest since June 11.

On the contrary, pandemic data from Australia and the US continues to keep the policymakers worries. While identifying this, Fed’s Bostic and the RBA sound pessimistic in their recent appearances. Though, NZIER’s Chief Economist defies the calls of severe economic contraction in the second quarter (Q2). Furthermore, the US traders’ group push for more purchases from the dragon nation as a part of the phase 1 deal whereas the EU showed dislike for American threats to levy tariffs on the bloc’s goods. It should also be noted that Japans’ Tokyo marked above 100 virus figures to 106 for the fifth day in a row.

Against this backdrop, the MSCI index of Asia-Pacific shares outside Japan rises 0.20% but Japan’s Nikkei 25 drop 0.65% to 22,572 while writing. Australia’s ASX 200 and New Zealand’s NZX 50 follow the footsteps of Chinese equities with below 1.0% gains while stocks in Hong Kong and South Korea buck the trend. Additionally, India’s BSE Sensex and Indonesia’s IDX Composite remain mostly unchanged as struggling for a clear direction.

Talking about the US catalysts, the 10-year Treasury yields step back from the previous day’s rise to take rounds to 0.68% whereas S&P 500 Futures part ways from Wall Street’s upbeat performance.