Asian Stock Market: Taiwan index steals bearish show with 7.0% drop, US CPI eyed
- Asian shares keep the red as geopolitical fears, chip supply woes join pre-US CPI caution.
- S&P 500 Futures drop for third consecutive day, commodities also weaken amid US dollar strength.
- US inflation data will be watched amid concerns over Fed tapering.
Asian equities aptly justify the risk-aversion wave by dropping the most in a month during early Wednesday. The pre-US inflation anxiety seems the major concern for market bears. However, doubts over chip growth and Israel-Palestine tension are also in the line to weigh on sentiment.
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops 1.43% while Japan’s Nikkei 225 marks 2.12% intraday loss ahead of Wednesday’s European session.
Stocks in Taiwan are the region’s biggest losers as fears of chip shortage backed the heaviest drop in 14 months, down 5.15% by the press time. Even so, Taiwan's stock market fundamentals are sound and people should remain calm, Deputy Finance Minister Frank Juan said per Reuters.
Elsewhere, Australia’s ASX loses 1.23% amid chatters that the Oz nation may lose its AAA rating but shares in New Zealand (NZ) are the least infected, down 0.25% intraday, as the Pacific traders await fresh clues amid talks over the RBNZ’s extended easy money policies. Further, China and Hong Kong stand near to NZ equities but Indonesia, South Korea and India tilt more towards Aussie losses by the press time.
Although a light calendar in Asia warrants the traders to follow the S&P 500 Futures, US Consumer Price Index (CPI) will be the key to predict near-term market moves. Forecasts suggest the headlines US CPI to jump from 2.6% to 3.6% YoY in April but traders seek a softer reading to tame tapering woes.
Read: US Consumer Price Index April Preview: The two base effects of inflation