Nov 03, 2022
VOT Research Desk
Following the hawkish Fed decision early on Thursday, the stock markets in the Asia-Pacific region are showing the expected movement.
Risk aversion may also be related to China’s economic problems and worries about North Korea’s influence on world politics.
However, recent market movements have been constrained by holidays in Japan and a light calendar abroad.
The MSCI’s index of Asia-Pacific equities ex-Japan reverses from a two-week high to register a 0.5 percent intraday loss heading into Thursday’s European session, which captures the sentiment. It should be highlighted that as concerns over COVID grow, Chinese stocks are still losing money.
Hopes for softening China’s zero-covid policy were dashed when the area surrounding the largest iPhone plant in the world went into lockdown.
Additionally, Reuters cites the most recent data from China’s National Health Commission to imply an increase in coronavirus cases. China recorded 3,372 new COVID-19 infections on November 2 of which 581 were symptomatic and 2,791 were not, according to the news.
In another incident, North Korea launched an unidentified ballistic missile toward the East Sea, which later flew over Japan, according to Reuters.
As a result, Japan issues a warning to its citizens to seek shelter from the threat of a North Korean missile. The US has recently warned Pyongyang about such efforts and stoked market jitters in Asia. It should be mentioned that the ASX 200 is under downward pressure due to the mixed Australian trade data and negative China Caixin Services PMI.
Additionally, Hong Kong markets are leading the bears as HKMA follows the Fed in raising rates by 0.75%.
As the S&P Global India services Purchasing Managers’ Index crept up to 55.1 in October from September’s six-month low of 54.3, versus 54.6 predicted, per Reuters, India’s BSE Sensex appeared to be breaking the slump, although with modest increases.
According to the news, despite significant inflationary pressures, activity in India’s main services sector accelerated in October, supported by strong domestic demand, which resulted in the second-fastest hiring pace in more than three years, according to a private survey.
