Asian Stock Market: China fails to change the mood amid inflation, growth fears

• Rising concerns over inflation, growth forecasts keep Asia-Pacific equities heavy.
• Covid news from China underpins rebound in stock futures but firmer yields weigh on mood.
• NZ, Indonesia budgets fail to renew optimism, Aussie jobs report came in mixed.

Markets in Asia-Pacific see the red, despite the recent rebound, as fears of inflation and growth battle cautious optimism in China during early Thursday. While portraying the mood, MSCI’s index of Asia-Pacific shares ex-Japan dropped by around 2.0% whereas Japan’s Nikkei 225 prints a 1.72% daily loss by the press time.

Shares in China recently pare losses, despite being in the red, as a fall in China’s covid numbers joins the gradual re-opening of Shanghai.

Australia’s ASX 200 and New Zealand’s NZX 50 dropped 1.56% and 0.90% respectively even as the mixed Aussie employment report for April couldn’t please stock investors, and neither did New Zealand’s budget that tried to help citizens battle inflation woes. However, Indonesia’s energy subsidies in the annual budget proposal manage to help IDX Composite to buck the broad bearish trend with 0.35% intraday gains.

Moving on South Korea’s KOSPI and India’s BSE Sensex drop more than 1.0% as traders mull over growth fears amid higher budget deficit and energy prices, as well as inflation fears across the globe.

On a broader front, Wall Street benchmarks posted the biggest daily loss in nearly two years as major investment banks downgrade growth forecasts after the recent bout of multi-year high inflation in developed economies. It’s worth noting, however, that S&P 500 Futures print mild gains around 3,930, after a downbeat start of the day, whereas the US 10-year Treasury yields rise 2.2 basis points (bps) to 2.90% by the press time.

Moving on, a light calendar puts investors at the mercy of risk catalysts and hence chatters surrounding inflation and growth may keep equities under pressure.

Also read: Dollar gains as fall in US stocks trigger risk aversion