Asian Stock Market: Tracks Wall Street losses amid fears of 75 bp Fed rate hike

• Equities in Asia-Pacific fail to track US stock futures as talks over Fed’s 0.75 rate-lift grow stronger.
• S&P 500 confirmed bear market with a 20% fall from recent record high.
• ASX 200 leads regional bears as hawkish hopes from RBA exert additional downside pressure on the Aussie shares.
• China’s covid conditions remain grim as Beijing reports the highest cases in three weeks.

Market sentiment remains grim in the Asia-Pacific zone following a bear market signal from Wall Street. The risk-aversion wave takes clues from increasing chatters surrounding the Fed’s 75 basis points (bps) rate hike, as well as the coronavirus woes emanating from China. In doing so, the investors ignore mildly bid S&P 500 Futures.

That said, the MSCI’s index of Asia-Pacific shares ex-Japan drops 1.04% whereas Japan’s Nikkei 225 declines around 2.0% to refresh a monthly low near 26,350.

It should be noted that Australia’s ASX 200 leads the bearish impulsive with around 5.0% fall as downbeat sentiment figures at home joins escalating chatters surrounding the Reserve Bank of Australia’s (RBA) aggressive rate hikes than what’s fears. It’s worth noting that the National Australia Bank’s (NAB) Business Conditions and Business Confidence gauges eased in May to 16 and 6 respectively versus the previous readouts of 20 and 10 in that order. Additionally, the Commonwealth Bank of Australia (CBA) mentioned that the RBA interest rate hiking cycle has started and is now expected to be more aggressive than earlier anticipated.

Elsewhere, Beijing covid cases hit a three-week high, per Bloomberg, which in turn propels the virus woes and the resulted economic fears that recently weighed on the risk barometer AUD/USD pair. “The city recorded 74 infections for Monday, the most since May 22, when Beijing saw a record number of cases for the current outbreak,” said Bloomberg.

With this, stocks in New Zealand drop nearly 4.0% while those from China and Hong Kong remain pressured with close to a 2.0% daily loss.

Further, equities in South Korea refrain from respecting the Bank of Korea’s (BOK) concerns for softer prices and inflation fears at home. As a result, the KOSPI drops 1.22% by the press time.

Additionally, stocks in Indonesia and India fail to buck the bearish trend even as the S&P 500 Futures rise 0.30% around the yearly low, mainly due to the retreat in the US Treasury yields ahead of Wednesday’s Federal Open Market Committee (FOMC).

Looking forward, the US Producer Price Index (PPI) for April, expected at 10.9% YoY versus 11.0% prior, could entertain traders ahead of the Fed meeting. Also important will be the Retail Sales data from the US and China.

Also read: S&P 500 Futures, US Treasury yields portray market’s consolidation ahead of Fed