Asian Stock Market: Australia bucks downtrend as mining shares rally, yields weigh on others

• Asian shares drift lower amid inflation, Ukraine woes.
• Aussie stocks up for second weekly gain on firmer iron ore prices, RBA’s inaction.
• Japan’s Nikkei 225 print mild losses as fears of BOJ intervention mount.
• China, Hong Kong remain in the red as global leaders criticize Beijing’s friendship with Moscow.

Asia-Pacific equities remain on the back foot, except for Australia, as pessimism surrounding a broad jump in inflation and the Ukraine-Russia crisis mount during early Friday. Also challenging the market sentiment are fears of North Korea’s missile launch.

Not only the hawkish Fedspeak but policymakers from the European Central Bank (ECB) and the Bank of Japan (BOJ) also conveyed inflation woes of late, which in turn propel fears of faster monetary policy normalization.

Though, a rally in the metal prices, mainly in Australia’s key earner iron ore, helps Australia’s ASX 200 to remain on the way to the second weekly gains, up 0.35% by the press time. “The metals and mining sub-index, which gained 0.9% to hit its highest in more than two weeks, was set for a 6% surge this week on strong iron ore prices as well as surging nickel that hit its upper trading limit on Wednesday,” said Reuters.

That said, the MSCI’s index of Asia-Pacific shares outside Japan drops around 0.80% while Japan’s Nikkei 225 prints 0.30% intraday loss.

Upbeat prints of Japan’s inflation data fuelled yields on the Japanese Government Bonds (JGBs) and triggered the market’s fears that the Bank of Japan (BOJ) will intervene soon, which in turn weighed on the Japanese equities.

Elsewhere, China couldn’t digest global criticism of its Russian ties, especially from the West, whereas economic fears due to the covid resurgence add to the woes of stocks in Beijing and Hong Kong. The stocks in Indonesia, India and South Korea were also down amid broad pessimism and firmer oil prices.

It’s worth observing, however, that the US Dollar Index (DXY) retreats and the Treasury yields also remain sluggish while the S&P 500 Futures print mild gains at the latest. The reason could be linked to Thursday’s positive closing of Wall Street, as well as mixed US data.

Moving on, headlines over Ukraine will be the key as the European leaders will have another day jostling over the Russia-Ukraine crisis. Further, the German IFO sentiment data for March and the US Pending Home Sales for February will decorate the calendar. Also important are the scheduled speeches from the Fed policymakers.

Read: S&P 500 Futures, yields retreat as Ukraine woes jostle inflation fears