Asian Stock Market: Consolidates recent gains as yields rebound ahead of US CPI

• Asia-Pacific equities print mild losses amid anxious markets, light calendar at home.
• Omicron updates flash mixed signals but China financial market risk grows.
• Fed tapering, rate hike chatters swirl with eyes on US inflation.

Asian shares drift lower as global markets turn cautious ahead of the key US inflation data on Friday. Adding to the risk-off mood are the escalating calls for the Fed’s faster tapering and rate hikes even as inflation expectations fade rebound from a two-month low. It should be noted, however, that the mixed concerns over the South African variant of COVID-19 and a light calendar at home restrict the market moves of late. Additionally, the concerns surrounding Russia and Iran’s tussles with the US add to the trading filters.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan drops 0.50% whereas Japan’s Nikkei 225 prints 0.65% intraday loss at the latest. Firmer prints of Japan’s Producer Price Index (PPI) in November could be cited as an additional burden on Tokyo-linked securities.

Fitch rang alarms over Evergrande and Kaisa’s likely default the previous day and the Chinese stocks couldn’t ignore the same while drowning stocks from Indonesia, South Korea and Pacific nations. It’s worth noting that India’s BSE Sensex drops 0.10% by the press time as INR eyes yearly bottom.

On a broader front, the US 10-year Treasury yields consolidate the previous day’s losses, up for the fourth day, while the S&P 500 Futures rise 0.15% at the latest.

Looking forward, markets are likely to witness a lackluster day ahead while waiting for the US Consumer Price Index (CPI) for November. However, fears over China’s financial market risk and Omicron could weigh on the risk appetite ahead of the data.

Read: US Treasury yields, S&P 500 Futures keenly await inflation signals