Asian stock market: Bears cheer virus-led economic woes
- 20th August 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY, Stock
- Asian equities drop further from seven month high flashed on Wednesday.
- A surge in new cases joins the US-China tussle and US dollar recovery to weigh on the market sentiment.
- Fed policymakers remain cautious despite receding pandemic numbers, US-Iran regains market attention.
Shares in Asia part ways from the seven-month top flashed the previous day as fears of the larger coronavirus (COVID-19) wave 2.0 joins downbeat FOMC minutes. Also challenging the market sentiment is the Sino-American tension and uncertainty over the trade deal review. Furthermore, upbeat US dollar performance and hopes of American stimulus add burden to the risk barometers. Again this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops 1.81% whereas Japan’s Nikkei 225 marks 1.0% loss to 22,887 as we write.
The latest Federal Open Market Committee (FOMC) minutes lacked reference to the yield curve control but keep the virus fears on the cards.
While zooming US central bank’s concerns, the St. Louis Federal Reserve President James Bullard said, per Reuters, that Wall Street has got it right and he expects the US to do better than many forecasters anticipate as businesses and households learn to manage COVID-19 risks. “Though the situation seems chaotic, with federal, state and local officials laying out competing ideas about what activities are safe and under what conditions,” Bullard said that shows adaptation in process, “and will allow the country to fine-tune behavior and economic activity to what a ‘persistent’ health threat allows.”
On the other hand, the US-China tussle is likely to get another boost as American intends to restore almost all sanctions on Iran and warned Beijing and Moscow to not meddle as they did in the recent past. Hence, shares in China get a beat of over 1.0% while those from Hong Kong drops more than 2.0% as we write. The losses spillover Australia’s ASX 200 that also bears the burden of a recent surge in virus numbers and drops 0.82%. Moving on, New Zealand’s (NZ) NZX 50 follows the footsteps of its largest customers, namely Australia and China, while declining near 1.0% even if RBNZ and NZ government tried to rekindle market optimism.
Elsewhere, South Korea KOSPI bears the burden of COVID-19 infections from church clusters while dropping over 3.5% to 2,275 while Indonesia’s IDX and India’s BSE Sensex drop around 0.50% and 0.80% at this time.
It should also be noted that the increase in virus numbers from the key European nations also threaten the market sentiment and drag the S&P 500 Futures by over 0.50%. Amid all these catalysts, the US dollar index (DXY) keeps recovery moves from 27-month low while attacking 93.00 by the press time.