ASIAN EQUITY ON RISE AMID TAPERING TALK GAINED TRACTION
Improving U.S. economic data and a more hawkish tone from Federal Reserve officials have led markets to expect the central bank to begin tapering its asset purchases later this year, pushing up yields and supporting the dollar.But the move has been well flagged, meaning a repeat of the so-called "taper tantrum" of 2013 that shook markets when the Fed began putting the brakes on its quantitative easing program, is unlikely. In Asia there's a little bit of concern about tapering but there is increasing understanding that we're unlikely to get a tantrum. Meanwhile,the dollar index rose to its highest since mid-July, gaining against the yen, while the euro neared year-to date lows against the greenback.MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.08% in Asian trading, with Chinese blue chips (.CSI300) down 0.38% Korea's KOSPI (.KS11) down 0.37%.
INDIA
The S&P BSE Sensex was little-changed at 54,526 on Wednesday, as investors paused for breath following a two-day rally that sent the index to an all-time high on Tuesday. Metal stocks rallied while small-and-mid cap firms cut early losses after the BSE stock exchange clarified that the new price circuit rules would be applicable on stocks that are priced above INR 10 and have a market capitalization of less than INR 10 billion. On the global front, worries about the economic impact of the rapidly spreading Delta variant continued to weigh.
JAPAN
The Nikkei 225 added 182 points or 0.65% to a near one-month high 28.070 on Wednesday, rising for the fourth straight session and tracking US stocks that closed higher Tuesday, as the Democratic-controlled Senate Tuesday passed a massive infrastructure bill and kicked off debate on a $3.5 trillion spending blueprint for President Joe Biden's key priorities. The sentiment was also boosted by upbeat earnings reports from tire maker Bridgestone, beverage firm Asahi Group Holdings, and the vacuum devices maker Ulvac. Meantime, Softbank Group said it would pause Chinese investments as it waits for regulatory action against the country’s tech firms to play out. On the pandemic front, over 80% of elderly people in Japan have been fully vaccinated against the COVID-19, while the government reportedly aims to accelerate inoculations for people in their 40s and 50s.
CHINA
The Shanghai Composite Index edged up 3 points or 0.1% to close at a near three-week high of 3,533 on Wednesday, after reports that developer China Evergrande Group plans to sell its certain assets. On the policy front, the PBoC said on Monday it would maintain the stability of monetary policy and avoid a ‘flood-like stimulus. Regarding the latest COVID-10 outbreak, the mainland reported 83 new locally transmitted cases on Tuesday, bringing the cumulative number of new infections in the past week to 583. In recent data, auto sales in China fell 11.9% yoy to 1.86 million units in July, the third straight month of drop, amid persistent a global shortage of semiconductors. Traders now await new Yuan loans data for July, along with outstanding loan growth and total social financing later in the day. Stocks in Hong Kong gained 0.2%, also hovering at a near 3-week high and rising for the third straight day.
