Asian stocks recover losses as US avoids quick retaliation to Iran attacks

• Shares in the Asia-Pacific region dropped initially after Iran fired shots at the US military bases in Iraq.
• The US President’s refrain from the immediate reaction, coupled with no major loss in the attack, seems to favor the latest risk recovery.
• Markets will keep eyes on trade/political headlines for fresh impulse.

Asian equities pull back from the early-day losses as risk sentiment improves ahead of the European session on Wednesday. While portraying the same, the MSCI index of Asia-Pacific shares ex-Japan bounces off the initial 1% loss to -0.45% whereas Japan’s NIKKEI steps back from more than -2.0% levels to 23,250, -1.35%, by the press time.

Iran hit the US military bases in Iraq during the early Asian morning on Wednesday. Tehran cheered it as the operation “Martyr Soleimani” and propelled the rush to risk-safety. However, the Middle East nation mentioned to not stop the attacks if the US refrains from any retaliation afterward. Additionally, the Editor of China’s Global Times (GT) also requested the US President to exercise restraint.

In a reaction, diplomats from the US said to “take all necessary measures to protect and defend”. Though, the US President later-on crossed wires and said, “All is well!”

This helped reset the market’s risk tone and pulled the global bonds, stocks from their early-day drop. Also, prices of Gold and Crude retrace their gains after the recent shift in the mood.

Even so, China’s SHANGHAI is -0.57% while India’s BSE SENSEX stands on the other side with a +0.60% mark to 40,640. Further, Hong Kong’s HANG SENG and Indonesia’s IDX Composite are -0.7% but gains are near to arrive for Australia’s ASX 200.

Looking forward, the US President Donald Trump has said to give a speech on Wednesday and will provide fresh direction to the markets. Also, the US ADP Employment Change and German Factory Orders could decorate the economic calendar.