- MSCI’s Asia-Pacific index (ex-Japan) bears the burden of Hong Market’s reopen after the Lunar New Year Holidays.
- Equities in the rest of Asia, like India, Japan and South Korea, follow Wall Street while HANG SENG responds to coronavirus outbreak.
- Today’s Federal Reserve meeting will be in focus despite no Fed interest rate change expected.
Asian equities miss portraying Wall Street-like rebound as reopening of Hong Kong’s markets weigh on the regional indices ahead of the European open on Wednesday. In doing so, the MSCI index of Asia-Pacific shares outside Japan lost 0.65% whereas Japan’s NIKKEI mark 0.57% gains by the press time.
Hong Kong’s HANG SENG portrays the equity traders’ first reaction to China’s coronavirus, with a 2.5% loss to 27,240. On the contrary, shares in India and South Korea followed the major US benchmarks that posted gains the previous day.
Australia’s ASX 200 benefited from the fourth quarter (Q4) CPI data, +0.53% to 7,053, while stocks in New Zealand also mark 0.14% profits to 350 following upbeat clues from the largest customer. It’s worth mentioning that trading in China will resume on February 03.
Except for Hong Kong, the recent risk-on could be attributed to the receding fears of coronavirus as Beijing’s readiness to confront the disease and its likely peak in ten days reset the market’s risk tone. With this, the US 10-year treasury yields also recovery from the lowest since October 2019 to 1.65%.
Moving on, today’s monetary policy meeting decision from the US Federal Reserve will be the key to watch. Even if the US central banker isn’t expected to alter its present course of monetary policy, traders will be watchful of how Chairman Jerome Powell reacts to the recent push to cut interest rates by US President Donald Trump.
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