Asian Stock Market: Pre-Fed cautious, growth fears weigh on sentiment

• Asia-Pacific markets remain pressured as investors  brace for the key week.
• Off in China fails to recall buyers as covid woes, Russia-Ukraine crisis challenge growth expectations.
• New Zealand opens border for 60 more countries, Australia witnesses upbeat PMI but activity contraction in China favor bears.
• South Korea raises concerns about rapid FX rate change.

Equity traders stay depressed during a comparatively light trading session in Asia, with Chinese markets off. The reason could be linked to the firmer US Treasury yields and anxiety ahead of this week’s key Federal Open Market Committee (FOMC). Also weighing on the market sentiment are the latest updates from Beijing and Russia.

That said, MSCI’s index of Asia-Pacific shares ex-Japan drop 0.30% while Japan’s Nikkei 225 printed mild gains around 26,900.

New Zealand opens its national borders for 60 countries, after a multi-month block due to the covid, but downbeat China PMIs for April drowned shares in Auckland, down 1.60% by the press time. On the same line is the Australian stock market where monthly PMIs print better readings for April but the ASX is down 1.5% by the press time.

Indian equities are down too amid the highest active covid cases in five weeks whereas South Korea’s KOSPI drops 0.40% amid hopes of market intervention.

On a broader front, the International Monetary Fund (IMF) also conveyed economic fears for the Asia-Pacific region, including India, while saying, “Economic growth in Asia and the Pacific will slow this year to 4.9%, less than last year’s 6.5% pace, amid the war in Ukraine, a resurgent pandemic, and rising interest rates.”

Additionally weighing on the risk appetite are the updates from Ukraine suggesting Russia’s aggression towards acquiring Mariupol and Germany’s step back from obstructing the oil ban on Russia.

Moving on, markets in Japan and China are mostly off till Wednesday but US ISM Manufacturing PMI, New Zealand Jobs report and the RBA meeting will entertain Asia-Pacific investors ahead of the key Fed meeting.

Also read: S&P 500 Futures turn pale above 4,100 as US Treasury yields stay firmer ahead of Fed, NFP