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Asian stocks: Mildly negative amid risk reset, China remains in the spotlight

  • MSCI’s gauge of Asia-Pacific equities snaps five-day gains following Friday’s looses of Wall Street.
  • A few of China’s workforce return to jobs, many still absent.
  • A major chunk of medical professionals arrive in Wuhan, China’s inflation data rose the fastest since October 2011.

Asian shares fail to hold onto recovery gains as fears of Coronavirus keep dominating trade sentiment. The return of some Chinese workers to the job and a plethora of doctors arriving in Wuhan joined a strong print of January month CPI. However, nothing of this could stop MSCI’s Asia-Pacific equity gauge (ex-Japan) to halt a five-day winning streak.

Wall Street also marked losses on Friday after the US Federal Reserve, in its bi-annual report, signaled higher risk of the coronavirus. Even so, upbeat prints of the US employment data curbed the downside.

Elsewhere, Japan’s NIKKEI loses 0.55% to 23,697 whereas Chinese benchmarks are also around 0.30% to 0.5% in losses. Further, Hong Kong’s HANG SANG and India’s NIFTY 50 are both 0.70% in red while South Korea’s KOSPI and Indonesia’s IDX mark 0.50% and 0.70% lose to 2,200 and 5,958 respectively.

The US 10-year treasury yields remain mostly unchanged to 1.587% by the press time whereas S&P 500 fails to register any moves while taking rounds to 3,325.

While China’s coronavirus updates will be the key drivers, US-China trade headlines, as well as any improvement in the risk-tone due to efforts from Beijing, should be watched closely for the near-term direction.

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