Asian stocks ignore soft China inflation as fears of US-Iran war recede

• Shares in Asian reversed Wednesday’s losses while cheering the US President Donald Trump’s restraint from military action, Iran’s readiness to stop the attacks.
• Early-day missile shots in Iraq’s green zone largely ignore and so does China’s weaker than expected CPI, PPI.
• World Bank anticipates recovery from emerging market economies, odds of the US-China trade deal also rise.

Asian equities stay on the front foot during the pre-European session on Thursday. The shares mainly benefited from the absence of the US-Iran war whereas an upbeat growth forecast from the World Bank adds to optimism. In doing so, China’s softer than forecast Consumer Price Index (CPI) and Producer Price Index (PPI) data for December seem to be ignored.

This could be traced to the South China Morning Post’s (SCMP) news citing China’s refrain from open market operations to have good looks in the book of the US. Also supporting the sentiment could be Reuters’ story mentioning record lending in 2019. Furthermore, the World Bank mentioned that global growth will be soft in 2019 and 2020 but emerging market economies, which include China, will recover.

However, the major boost seems to be from the US-Iran front wherein the US President Donald Trump’s measured response and no “fire and fury” propelled the risk recovery. News also crossed wires that the US is ready to have serious talks with Iran without any preconditions.

With all this, the US 10-year treasury yields gain their +1.80% stand back while the MSCI index of Asia-Pacific shares ex-Japan mark +1.4% gains to 696.60, with Japan’s NIKKEI rising 2.22% to 23,720, by the press time.

Markets in China are mostly +1.0% whereas Indian benchmarks register higher gains, SENSEX +1.34% to 41,365. Additionally, Hong Kong’s HANG SENG is +1.5% to 28,495 while Australia’s ASX 200 seems to cheer expectations of easing from China and upbeat trade balance numbers at home with 0.90% profits to 6,875.