Asian Stock Market: Mildly offered as China, Japan and South Korea tease bears ahead of Fed

• Market sentiment sours in Asia-Pacific as Sino-American tension joins Japan’s US tariffs and Samsung’s pessimism.
• Fears concerning North Korea, Iran and Russia add to the risk-off mood but nothing key ahead of the Fed.

Asian stocks drift lower as geopolitical risks join the pre-Fed trading lull to bore market players during early Wednesday. As a result, MSCI’s index of Asia-Pacific shares outside Japan drops 0.37% whereas Japan’s Nikkei 225 losses 0.23% to 29,853 by the press time.

Starting with China, the US doesn’t like Beijing’s intervention in local politics and stays ready to act but this week’s talks are the key. Moving on, Japan levies an extra charge on American beef imports whereas North Korea is likely aiming for fresh missile tests. Additionally, South Korea likes US Treasury Secretary Janet Yellen’s readiness to cooperate on trades but Samsung’s fears of chip shortage roil pushes KOSPI to be the biggest loser of the region, down 1.0% by the press time.

Elsewhere, chatters that Iran is building more nuclear weapons and the UK is up for taming Tehran outside the deal also weigh on the mood. Furthermore, the US sanctions Russia and Australia’s cautious optimism are extra filters to the sentiment.

It should be noted that the RBA policymakers keep rejecting the need to taper while a light calendar offers no major direction to the stocks in Asia-Pacific and hence the sideways-to-negative moves continue.

As a result, Chinese stocks drop around 0.50% on average while Australia’s ASX 200 and New Zealand’s NZX 50 are on the same line. Hong Kong’s Hang Seng and Indonesia’s IDX Composite are mildly offered too but India’s BSE Sensex becomes the least damaged gauge amid vaccine optimism at home.

S&P 500 Futures and the US 10-year Treasury yield are both struggling for a clear direction whereas the US dollar index (DXY) prints a four-day winning streak with eyes on the Federal Reserve decision.

Read: Federal Reserve Preview: The Good, the Bad and the Ugly edition, three critical things to watch