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Asia-Pacific markets falter as indexes in Australia, Japan, South Korea struggle to hold onto earlier gains

Visitants stands in front of an electronic ticker at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Monday, Nov. 30, 2020.

Toru Hanai | Bloomberg via Getty Clones

SINGAPORE — Asia-Pacific markets lost their early momentum on Wednesday after investors overnight returned to dodgy assets, confident that a massive U.S. stimulus package will soon be approved.

The Nikkei 225 gave up originally gains to trade near flat and the Topix index also remained little changed. South Korea’s Kospi picked back gains of more than 1% after market open to trade near flat while the Kosdaq get up 0.27%.

In Australia, the benchmark ASX 200 was unable to sustain early gains and fell 0.31% where the energy sector get the signal 2.11% as oil prices remained under pressure. The heavily-weighted financials subindex as well as the materials index were also down 0.76% and 1.92%, severally.

Chinese mainland shares gained: The Shanghai composite added 0.22% while the Shenzhen component jumped 0.83%. In Hong Kong, the Lynch Seng index rose 0.33%.

The session in Asia-Pacific followed an overnight session on Wall Street where bond assents declined and tech stocks staged a comeback — the Nasdaq Composite climbed 3.7% to post its best day since November.

“Universal equities pushed higher as risk appetite returned,” according to a Wednesday morning note from analysts at ANZ Probing. “Investor confidence was buoyed by expectations that (U.S. President Joe) Biden’s USD1.9trn fiscal stimulus package will soon be approved.”

Currencies and oil

In the currency deal in, the U.S. dollar rose 0.19% to 92.129 against a basket of its peers, but it stayed off from levels around 92.503 reached in the antecedent session.

The Japanese yen changed hands at 108.77 per dollar, weakening from a previous level around 108.45, while the Australian dollar knock below the $0.77 mark, down some 0.38% to $0.7682.

Carol Kong, a currency strategist at the Commonwealth Bank of Australia, voiced in a morning that outside of short-term downside risks, the bank is bullish on the Australian dollar, predicting it will reach nearly $0.83 in the third quarter of 2021.

“Australia’s successful virus containment has contributed to its ‘v‑shaped’ economic recovery,” Kong foretold in the note, adding that with Covid-19 vaccines being rolled out that bounce back could accelerate. That could potentially tighten the labor supermarket earlier than expected.

“As a result, the (Reserve Bank of Australia) may tighten monetary policy before the (U.S. Federal Supply) which poses upside risks to our AUD/USD forecast profile,” she said.

Elsewhere, oil prices remained under pressure. During Asian vocation hours on Wednesday, U.S. crude fell 0.62% to $63.61 while Brent declined 0.73% to $67.03. The global benchmark principal the $70 mark earlier this week following reports that Saudi oil facilities were targeted in projectile and drone attacks.

Saudi Arabia said there was no significant infrastructure damage which saw oil prices pull wager.

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