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Asian Stock Market: Follows footprints of upbeat S&P500, DXY turns sideways, oil drops

  • Asian equities are displaying solid gains amid a risk-on market impulse.
  • Chinese indices turned nervous ahead of Caixin Manufacturing PMI data.
  • Oil prices have dropped below $87.00 amid growing demand worries ahead of Fed policy.

Markets in the Asian domain are displaying solid gains on Monday tracking decent weekly returns in S&P500. The 500-stock basket witnessed a stellar buying interest after investors shrugged off uncertainty on tech’s earnings guidance. The risk profile is upbeat as the US dollar index (DXY) is displaying a subdued performance in the Tokyo session.

At the press time, Japan’s Nikkei225 soared 1.64%, ChinaA50 remained almost flat, Hang Seng jumped 1.60% and Nifty50 climbed 0.93%.

Chinese markets have turned nervous ahead of the Caixin Manufacturing PMI data, which will release on Tuesday. The economic data is seen higher at 49.0 vs. the prior release of 48.1. Official Manufacturing PMI which release before the Caixin Manufacturing PMI has remained downbeat.

China’s official Manufacturing PMI has landed lower at 49.2 vs. the projections of 50.0 and the prior release of 50.1, reported by the National Bureau of Statistics. Also, the Non-Manufacturing PMI has been recorded as significantly lower at 48.7 against the expectations of 51.9 and the former release of 50.6. It seems that the continuation of the no-tolerance Covid-19 policy has weighed pressure on economic activities.

Meanwhile, Japanese equities are having a ball with an expectation of more stimulus in the economy by the Bank of Japan (BOJ) to support the economy from external demand shocks and weaker economic prospects. It is worth noting that BOJ Governor Haruhiko Kuroda kept the monetary policy unchanged on Friday.

On the oil front, rising odds of a bigger rate hike by the Federal Reserve (Fed) are weighing on oil prices. The oil prices have dropped sharply below $87.00 as more policy tightening measures by the Fed will trim the oil demand ahead.