Asian stock market: Mildly bid amid pre-FOMC trading lull
- A lack of major negatives keeps Asian equities cheer hopes of the economic restart.
- Upbeat data from South Korea, Australia strengthened respective markets.
- A brewing tussle between the US and China keep risk-on sentiment under check.
- Moody’s expects economies of the group of 20 advanced nations (G-20) to shrink 5.8% in 2020.
With the off in Asian major Japan, the pre-FOMC trading lull gained momentum during the pre-European session on Wednesday. Even so, major stocks benefited from the talks of easing lockdowns in Australia, New Zealand, the US and Europe. Also helping the momentum were upbeat data from Australia and South Korea while Moody’s downbeat forecasts checked the bulls.
While portraying the mildly upbeat sentiment, MSCI’s index of Asia-Pacific shares outside Japan registers 0.77% gains by the press time. Though, stocks in New Zealand drops after Trade Balance slipped below $-3.3B prior to $-3.46B yearly.
On the contrary, Australia’s upbeat CPI and South Korea’s Industrial Output manages to keep ASX 200 and KOSPI on the positive side. Also joining the line is Indonesia’s IDX Composite that picked up bids on Bank Indonesia (BI) Governor Perry Warijyo’s upbeat remarks.
Furthermore, Chinese stocks rise 0.20% despite the recent tension with the US while those from India benefit from the government’s sustained efforts to keep the locals happy and combat the coronavirus (COVID-19).
It should, additionally, be noted that oil prices bounced off weekly lows near $10 to $14 whereas Reuters came out with Moody’s downbeat economic forecast.
Looking forward, the US Federal Reserve’s monetary policy meeting will be the key to watch for the markets. Even if the US central bank isn’t expected to alter present monetary policy, dovish comments from Chairman Jerome Powell are likely to keep the market’s risk-tone under pressure.
Other than the FOMC, the preliminary reading of the US first quarter (Q1) 2020 GDP and European inflation data will also be the key to watch.