Asian Stock Market: Russia-Ukraine crisis, China-US tensions keep sentiment fragile

• Asia-Pacific shares drift lower on news over Ukraine’s violation of ceasefire.
• US dislike for China’s failures to meet Phase 1 deal targets also weigh on mood.
• Chatters surrounding Fed, PBOC and Japan keep traders hopeful.
• Mixed Aussie data, doubts of RBNZ rate hike favor ASX 200, NZX 50.

Market sentiment remains sour during Thursday’s Asian session, initially due to the indecision over geopolitical and Fed-linked concerns before the news from Russia roiled the mood.

The doubts over Russia’s rolling back of some troops from the border and the US-China Phase 1 deal headlines were challenging the market sentiment. However, major attention was given to the news from Sputnik which mentioned that Ukraine fired mortar shells and grenades on Luhansk People's Republic (LPR) locations.

It’s worth noting that Reuters quoted other sources to placate the bears while reporting, “Russian-backed rebels in eastern Ukraine accused Kyiv government forces on Thursday of using mortars to attack their territory, in violation of agreements aimed at ending the conflict, the RIA news agency said.”

Amid these plays, MSCI’s index of Asia-Pacific shares ex-Japan rises 0.30% intraday while Japan’s Nikkei 225 dropped 0.75% heading into the European session.

Moving on, mixed employment data from Australia joined the UK-Aussie trade talks to help ASX 200 print mild gains. Additionally entertaining Aussie equity bulls were headlines concerning Australia’s Woodside Petroleum Ltd. and Crown Resorts.

Further, NZX 50 paid a little heed to the calls from an ex-RBNZ official favoring a 0.75% rate hike.

Chinese stocks are mildly positive at the latest amid speculations that the People’s Bank of China (PBOC) has scope to ease further amid downbeat inflation and recently firmer yuan.

Elsewhere, Indonesia’s IDX Composite drops 0.80% while hosting G20 Finance Ministers whereas Hong Kong’s Hang Seng drops as Beijing pushes the political partner to overcome the covid crisis.

Stocks in India track mild gains of China whereas US Treasury yields and stock futures remain on the back foot by the press time.

It should be noted that the Fed policymakers’ hesitance to back the 0.50% rate-hike for March gains little acceptance from the market as the recent data has been strong enough to push Fed towards heavy rate lifts. Hence, today’s Fedspeak and second-tier data will be important to watch. Also important will be geopolitical and trade headlines.