Since this March, the Asian market has somewhat underperformed when viewed globally due to rising COVID-19 cases from India to Japan, just when things started to look better in terms of global recovery.
According to Paul Sadhu, the head of multi-asset quant solutions at BNP Paribas Asset Management, most markets have become way too comfortable with the re-opening trade, thus loosening social restrictions that can potentially jeopardize the revitalization of said markets if new Covid spike would happen, but also stated that markets with better vaccination figures can somewhat fight this problem.
The latest WHO report seems to back up the surge claims as new cases are on the rise in most markets except for Europe. India and Japan are hit the hardest, with the latter country being on the brink of declaring an emergency as the number of new cases rise in Osaka and Tokyo.
Joshua Crabb, senior manager at Robeco, Hong Kong also believes that countries with better vaccine rollouts will probably maintain better market figures if they manage to ensure more efficient shots and booster ones for the newly vaccinated and already vaccinated to fight against the more virulent strains of the virus.
Furthermore, stocks were set for the largest decline in the past month in Asia last week, as Japanese shares performed rather weakly and slowed down the economic upswing slightly.
Margaret Yang, a strategist at DailyFX believes that the resurgence of the virus in these Asian countries drove the global stock market to play it safe and to use defensive tactics and it looks like the reflation trade got pushed in the background.