Asian Stock Market: China reopening, easy Fed bets underpin firmer sentiment amid Tokyo’s absence

  • Asia-Pacific equities trace Wall Street’s gains even as Japan cheers extended weekend.
  • China’s openings of international borders, year-end shopping spree favor sentiment.
  • Downbeat US data weigh on hawkish Fed wagers, tease US recession.
  • Light calendar, off in Japan restrict market moves ahead of inflation data from China, Japan and US.

Market sentiment improves in Asia as China drops the last flag of the zero-Covid policy and the softer US wage growth data challenged hawkish Fed wagers. Even so, an absence of traders from Tokyo and a light calendar, as well as a cautious mood ahead of this week’s key inflation data, restrict the volatility during early Monday.

While portraying the mood, MSCI’s index of the Asia-Pacific shares outside Japan rises 2.25% to print the highest levels since late September. On the same line could be the shares from South Korea, Taiwan and India as each one of them rises over 1.0% intraday by the press time.

Chinese blue-chip stocks cheer the latest shopping spree in the dragon nation, as per the early activity signals for December and early January, whereas Australia’s ASX 200 and New Zealand’s NZX 50 trace equities in Beijing due to their trade ties with the Asian major.

It should be noted that mildly bid ASX 200 ignores downbeat prints of Aussie Building Permits for November.

China’s reopening of the international borders after a three-year blockage bolstered optimism in Asia. Also favoring the risk appetite could be comments from the People’s Bank of China (PBOC) Official who hinted at robust growth expectations from the dragon nation.

Additionally, Friday’s downbeat prints of US Average Hourly Earnings, ISM Services PMI and Factory Orders pushed back the hawkish hopes from the US Federal Reserve (Fed) as the figures raised US recession concerns. The same joined mixed comments from the Fed policymakers and hopes of an upbeat US earnings season to also favor risk-on mood in Asia.

On a broader front, S&P 500 Futures print mild gains while India’s benchmark equity index BSE Sensex rises over 1.0% by the press time. Also portraying the risk-on mood could be the upbeat oil prices, as well as the softer prints of the US Dollar Index (DXY).

Looking forward, a light calendar may allow the equity bulls to keep the reins but this week’s inflation data from the US, China and Japan are crucial for near-term direction.