Asian Stock Market: Looks subdues as Fed cements fears of US recession, oil consolidates near $83.00
- Asian stocks are demonstrating a subdued performance amid soaring fears of a mild recession in the US.
- Chinese stocks are facing pressure despite the release of upbeat international data.
- Oil prices have turned sideways around $83.00 after the release of a mild build-up of oil inventories.
Markets in the Asian domain are showing a subdued performance after observing weak cues from United States markets. S&P500 settled Wednesday’s session on a bearish note as US core inflation rebounded to 5.6% from the former release of 5.5% due to persistent rent prices and signals of mild recession from the Federal Reserve’s (Fed) minutes of the May monetary policy meeting.
Fed minutes conveyed that policymakers are anticipating a mild recession later this year due to the banking crisis and higher interest rates.
The US Dollar Index (DXY) has shown a recovery as hawkish Fed bets have not waned despite softening of US inflation.
At the press time, Japan’s Nikkei225 gained 0.18%, SZSE Component dropped 0.56%, Hang Seng slipped 0.46%, and Nifty50 eased 0.16%.
Chinese stocks are facing pressure despite the release of upbeat international data. China’s Trade Balance data (in US Dollars) has landed at $88.19B, significantly higher than the consensus of $39.2B but lower than the former release of $116.8 B. Annual Imports have contracted by 1.4% while the street was expecting a contraction of 5%. However, Exports have expanded significantly by 14.8% against a contraction of 7.0% as expected.
An upbeat China’s EXIM data might roll back the lost confidence of investors that the economy has not derailed from the track of economic recovery.
Meanwhile, Japanese equities have been showing resilience as Bank of Japan (BoJ) Governor Kazuo Ueda has conferment continuation of expansionary monetary policy to keep inflation steadily above 2%. More stimulus in the Japanese economy would stimulate economic growth.
On the oil front, oil prices have turned sideways around $83.00 after the release of a mild build-up of oil inventories last week. The US Energy Information Administration (EIA) reported a build-up of oil stockpiles by 0.597 million barrels against the expectations of a drawdown for the week ending April 07.