In spite of the recent recovery, the markets in Asia and the Pacific are trading in the red on Thursday morning as worries over inflation and GDP face up against cautious optimism in China. MSCI's index of Asia-Pacific equities outside Japan fell by almost 2.0 percent, while the Nikkei 225 of Japan printed a daily loss of 1.72 percent as of the time of the press. Both indices reflect the current market sentiment.
Even while China's stock market is still in the red, recent losses have been reduced. This is due to a combination of factors, including a drop in China's covid numbers and the gradual reopening of Shanghai.
Even while the mixed Australian jobs data for April couldn't delight stock investors, neither could the New Zealand budget that aimed to help residents face inflation concerns. Both the Australian ASX 200 and the New Zealand NZX 50 declined by 1.56 percent and 0.90 percent respectively. Despite this, Indonesia's energy subsidies in the annual budget proposal helped the IDX Composite to post intraday gains of 0.35 percent, bucking the general downward trend.
Moving on, the South Korean Kospi and the Indian BSE Sensex both dropped by more over one percent as traders mulled over growth uncertainties in the midst of increased budget deficits and energy prices, in addition to inflation fears throughout the globe.
On a broader front, benchmarks on Wall Street posted the largest daily loss in nearly two years, as major investment banks downgrade growth forecasts in the wake of the recent bout of multi-year high inflation in developed economies. This brought the average loss for a single trading day to its lowest level in nearly two years. It is important to note, however, that despite a negative start to the trading day, S&P 500 Futures have managed to post slight gains around 3,930, while 10-year Treasury rates in the United States have risen 2.2 basis points (bps) to 2.90 percent as of the time of this writing.
Moving on, a light economic calendar leaves investors vulnerable to risk triggers, and as a result, discussions on inflation and growth may continue to keep equity prices under pressure.