Asian Stock Market: Trades mixed as China PMI, pre-Fed fears join stimulus hopes

  • Asian shares dwindle despite China Caixin PMI’s positive surprise, Japan’s Nikkei 225 rally on PM Kishida’s re-election.
  • US inflation woes underpin Fed tapering concerns, EU-US join to battle China over steel, aluminum.
  • Australia eases international border restrictions for the first time in nearly 18 months.
  • RBA, NZ inflation, Fed meeting are the key events of the week.

Asian equities fail to portray clear direction even as Japan’s Nikkei 225 jumps over 2.0% during early Monday. The reason could be multiple, including the pre-Fed cautious, fears over supply concerns weighing on the economic rebound off the pandemic and the US stimulus hopes.

Amid these plays, the MSCI’s index of Asia-Pacific shares outside Japan drops 0.50% heading into Monday’s European session.

Although China’s Caixin Manufacturing PMI contrasts the official PMI readings for October, the underlying details highlight supply crunch and raise doubts on the further economic strength of the world’s second-largest economy. Also portraying the factory growth sluggishness is the PMIs from South Korea.  Amid these plays, markets in China and South Korea trade mixed whereas shares in Hong Kong print 1.25% losses at the latest.

On the contrary, Japan’s Jibun Bank Manufacturing PMI rose past 53.0 expected and prior data to 53.2. The same joined Prime Minister Fumio Kishida’s victory in snap elections to back the Japanese market bulls.

Elsewhere, Australia opens international borders after 18 months whereas New Zealand sounds cautious over lifting the virus-led activity restrictions. The same joins fears of economic recovery concerning China to probe bulls on the ASX 200 and the NZX 50 respectively.

S&P 500 Futures rise 0.20% around the record top as US stimulus hopes battle Fed tapering chatters. The same underpins the US 10-year Treasury yields to remain firmer by the press time.

Markets in Indonesia and India remain mildly bid amid receding COVID-19 fears and expectations that the festive season will underpin economic growth after a few months of sluggish economic momentum.

Looking forward, the monetary policy meeting of the Reserve Bank of Australia (RBA) will precede New Zealand (NZ) jobs report and the US Federal Reserve (Fed) meeting to entertain the Asia-Pacific traders. For now, US ISM Manufacturing PMI, expected 60.4 versus 61.1, may entertain investors.

Read: S&P 500 Futures print mild gains as stimulus hopes battle firmer US Treasury yields

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