Asian stocks drop amid global pessimism, Brexit woes

Asian stocks failed to sustain recent uptick and rejoined the red on Wednesday as lack of macro data supporting global economic growth coupled with Brexit woes challenged investor sentiment. Markets in Japan witnessed heavy declines and Australian traders also turned bear on sluggish data.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.45 percent in slow trade, Reuters reported. Markets in Singapore lost 0.76% whereas stocks in India and Vietnam gained during early hours. 

Fall in Japanese machinery orders resulted in nearly 1% drop in Nikkei while Australia’s S&P/ASX 200 was down 0.2% at the press time after witnessing disappointment from monthly Westpac consumer confidence figure.

While lack of fresh positive impulse recalled bears at Asian markets, recent news from the UK suggesting PM Theresa May’s another defeat in convincing British lawmakers to support her Brexit plan also favored risk-off. Additionally, news that some headline negotiators from the US, including trade representative Robert Lighthizer and secretary of state Mike Pompeo, expect hardships in the US-China trade deal also strengthened pessimism.

Moving forward, developments surrounding the Brexit can offer intermediate direction to markets while Thursday’s February month retail sales and industrial production from China could become important to watch. While industrial production is expected to increase by 5.5% from 5.7% prior on YoY, retail sales growth could also soften to 8.1% from 8.2% yearly.