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  • Asian shares remain on the backfoot amid fears of a delay in the US stimulus, anti-China policies.
  • Beijing reported recovery in virus conditions at home, vaccine updates have been positive as well.
  • Japan mulls extension to covid emergency, NZ-China ready for upgraded trade deal.

Asian equities remain on the back foot while heading into Tuesday’s European session as market mood sours on increasing odds of further delay in the much-awaited US stimulus.

Also weighing on the sentiment in Asia could be the formal selection of Janet Yellen for the US Treasury Secretary’s post. The reason could be the ex-Fed boss’s earlier comments suggesting dislike for China, the Asian giant.

It should be noted that AstraZeneca and Moderna tried to lift the mood by showing the capacity to tame the covid variants but couldn’t withstand the market’s cautious tone ahead of the FOMC, US Q4 GDP. Additionally, a reduction in China’s coronavirus (COVID-19) numbers also seems to probe the bears. Reuters said, “China reported a fall in new COVID-19 infections as the number of cases in two of the provinces particularly hard hit by the latest coronavirus wave fell to single digits, official data showed on Tuesday. A total of 82 confirmed cases were reported in the mainland on Jan. 25, the National Health Commission said in a statement, down from 124 cases a day earlier.”

News of New Zealand’s (NZ) upgraded trade deal with China and Japan’s likely extension to the virus-led emergencies are extra catalysts that trouble the market players amid a light calendar and off in Australia and India.

Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drop 1.68% whereas Japan’s Nikkei 225 declines 0.93% by press time. Stocks in China are the hardest hit with nearly 2.0% losses whereas those from New Zealand mark around 0.30% intraday losses by the time of the press.

Elsewhere, Indonesia’s virus woes weigh on the IDX Comprising but South Korea’s KOSPI fails to respect upbeat GDP data for Q4 GDP. Moving on, S&P 500 Futures remains heavy, declining 0.40% intraday currently, while the US 10-year Treasury yields probe the early January lows amid the risk-off mood.

Looking forward, global markets are likely to witness a “wait-and-watch” approach for near-term direction unless any surprises from the US Congress propels the sentiment by escalating President Joe Biden’s stimulus.