Asian Stock Market: Bulls and bears jostle amid growing fears of Russia-Ukraine war

• Asia-Pacific shares trade mixed as China, India entertain bulls amid broad risk-off mood.
• CNY injects CNY 300 billion via one-year MLF, India cancels weekly debt auction for the second consecutive time.
• Japan’s Q4 2021 GDP eased below forecasts, RBA Minutes repeated policymakers’ concerns to remain patient.
• US, EU stock futures print mild losses, Treasury yields are down too.

Markets in Asia-Pacific region portray sour sentiment, except for China and India, amid escalating concerns of Russia’s imminent invasion of Ukraine. Also challenging the risk appetite are the headlines suggesting faster Fed rate-hike and US-China trade tussles.

Amid these plays, the MSCI’s index of Asia-Pacific shares ex-Japan drops 0.40% whereas Japan’s Nikkei 225 prints 0.80% intraday losses while heading into Tuesday’s European session.

Headlines conveying satellite images of multiple pre-war measures near the Russia-Ukraine border seem to have recently spoiled the market’s mood. It’s worth noting that the chatters over February 16 being the D-day for the Russian invasion of Ukraine have previously weighed on the risk appetite. However, no official communication relating to the same has been found, which in turn keeps markets hopeful of overcoming the recent fears.

Japan’s Preliminary Gross Domestic Product (GDP) for Q4 rose 1.3% QoQ versus 1.4% expected and -0.9% prior. Further, GDP Annualized also reversed the previous readouts of -3.6% with +5.4% figures but stayed below 5.8% market consensus. Further, the preliminary readings of GDP Deflator dropped to -1.3% YoY, below -1.2% expected and prior.

Also decorating the calendar were RBA Minutes and Indonesia trade numbers. The latest Minutes of the Reserve Bank of Australia (RBA) monetary policy meeting stated, “Members observed that the achievement of the goals was within sight for the first time in several years.” However, the comments line, “Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve,” favored ASX 200 to trim losses, down 0.50% intraday at the latest.

On the other hand, Indonesia’s Exports dropped below 33.86% expected and 35.3% prior to 25.31% whereas the Imports declined to 36.77% versus 51.38% market consensus and 47.93% previous readouts. However, Trade Balance improved to $0.93B compared to the $0.19B forecasts, versus $1.02B prior. This seems to help IDX Composite, coupled with gains in China, to rise 0.75% on a day.

Moving on, the People’s Bank of China (PBOC) injected CNY300 billion via one-year medium-term lending (MLF) facility. In doing so, the Chinese central bank kept the rate for one-year MLF operation rate unchanged at 2.85% after cutting it from 2.95% last month. The same favored stocks in China and Hong Kong.

It should be noted that the Indian government’s cancellation of the weekly debt auction also renewed optimism in the local markets and favored BSE Sensex to rise 1.40% by the press time.

On a broader front, risk-off mood the US Treasury yields pare intraday losses around 1.98%, down 1.5 basis points (bps), whereas the S&P 500 Futures remain indecisive at the latest. On Monday, the bond coupons regained upside momentum after stepping back from a 2.5-year high on Friday whereas the Wall Street benchmark closed in the red, despite mildly positive week-start performance.

Read: US T-bond yields fade week-start rebound, S&P 500 Futures remain indecisive