Asian Stock Market: Growth, inflation concerns weigh on sentiment

• Asian equities remain depressed as price pressure, recession woes dominate.
• Pullback of Treasury yields allowed bears to take a breather but bulls remain away from table.
• Hawkish Fed, US data weigh on risk appetite, China-linked fears add to the pessimism.

Growing fears of global recession joined the hawkish central bank chatters to weigh on Asian markets during early Thursday. Adding to the market’s pessimism is the trade-negative news from China. However, a pullback in Treasury yields and oil prices seems to chain the bears during the lackluster session.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan drops 1.1% whereas Japan’s Nikkei 225 prints a 0.11% daily loss by the press time.

It’s worth noting that the comments from Bank of Japan (BOJ) board member Seiji Adachi, supporting the BOJ’s easy money policies, seemed to have trimmed losses of the Nikkei 225 of late.

Elsewhere, China’s blue-chip index drops near 0.50% while Hong Kong’s Hang Seng loses more than 1.5% at the latest.

Further, Australia’s ASX 200 lost around 1.0% even as Australia’s trade numbers came in positive for April. On the same line was New Zealand’s NZX 50 which failed to cheer upbeat prints of the Q1 Terms of Trade Index, down 0.75% intraday at the latest.

In addition to the broad fears, Reuters’ news suggesting the US readiness to implement a ban on Xinjiang goods also roil the mood in major markets. Further, comments from China's Ambassador to Australia, Xiao Qian, hint at no relief to Aussie business houses from Beijing’s ban despite the change in government exerting additional downside pressure on Aussie shares.

It should be observed that mixed prints of Indonesia’s Inflation data for May could provide proper directions to IDX Composite, losing 0.10% to 7,141 by the press time, whereas South Korea’s KOSPI loses over 1.0% while tracking the across the board dullness.

On a broader front, S&P 500 Futures struggle to defend the 4,100 level whereas the US 10-year Treasury yields retreat from a two-week high, down 1.8 basis points (bps) to 2.91% of late.

Looking forward, the OPEC meeting and the US ADP Employment Change for May, expected at 300K versus 247K prior will be important for Asian markets ahead of Friday’s US Nonfarm Payrolls.