Asian Stock Market: Hang Seng drops 4.0% on Evergrande, pre-Fed woes despite China, Japan off

• Asian shares remain pressured amid fears of wider crackdown on real-estate markets, pre-Fed anxiety.
• US stimulus, debt limit chatters add to the negative factors even as off in China, Japan limit market moves.
• Fed, BOE in the focus, Chinese efforts to safeguard investors will be the key.

Asian equity bears tighten controls without traders China and Japan to kick-start the key week. While the pre-Fed caution becomes the headline factor for the risk-off mood, fears over default of China’s real-estate giant Evergrande and chatters concerning the US stimulus, as well as debt limits, underpin the sour sentiment.

That said, MSCI’s index of Asia-Pacific shares outside Japan drops 1.80% by the press time of the pre-European session on Monday. That said, stocks in Australia are down 1.9% whereas those from New Zealand drop 1.40% at the latest.

Although China and Japan both enjoy a banking holiday, fears of a wider crackdown on Hong Kong reality firms after Evergrande's fiasco drag the Hang Seng 4.0%.

It’s worth noting that the Markets in South Korea are off as well whereas those in Indonesia track macro clues to print 1.25% intraday fall by the time of the press. It’s worth noting that India’s BSE Sensex seems to be the least infected down 0.30% on a day, among the group amid cautious optimism at home.

Other than the fears emanating from Chinese firms and taper tantrums, uncertainty over the US covid stimulus also weighs on the market sentiment. “Senior Democrats said on Sunday that they will likely need to scale back President Joe Biden's $3.5 trillion social spending bill while the passage of the linked bipartisan infrastructure bill may slip past a Sept. 27 deadline,” per Reuters.

On the contrary, US Treasury Secretary Janet Yellen’s push for another extension to the US debt limit, as the current limit goes off from October, challenges the bears.

Amid these plays, S&P 500 Futures drop 0.80% intraday while the US Dollar Index (DXY) weighs on commodity prices by the press time.

Moving on, the market sentiment is likely to remain dull ahead of the key weekly events but an absence of traders from China and Japan may limit market moves.

Read: The week ahead: Fed meeting, Bank of England, Canada and Germany elections, Kingfisher, Nike, Fedex