Asian Stock Market: Mildly positive as Fed looks set to slow down rate hike pace, oil accelerates
- Asian stocks have found a cushion as the Fed is set to trim the policy tightening pace.
- Chinese equities are showing strength despite the Caixin Manufacturing PMI missed estimates.
- The announcement of the Union Budget by Indian FM will escalate volatility in the Nifty50 index.
Markets in the Asian domain are mildly positive as investors are capitalizing on the context of a further slowdown in the policy tightening pace by the Federal Reserve (Fed). Investors are shrugging off rising United States recession fears, which has provided a cushion to global equities. S&P500 futures are showing losses in early Asia after a bullish session on Tuesday. The US Dollar Index (DXY) is displaying topsy-turvy moves in a 101.70-101.80 range, portraying ambiguity in the sentiment of the market participants.
At the press time, Japan’s Nikkei225 added 0.10%, SZSE Component gained 0.40%, Hang Seng jumped 0.42%, and Nifty50 climbed 0.72%.
Chinese stocks are showing resilience despite the unimpressive Caixin Manufacturing PMI numbers. The economic data has landed at 49.2 lower than the expectations of 49.5 but higher than the former release of 49.0. The street was expecting a better-than-expected performance after getting positive cues from China’s official Manufacturing PMI data.
Manufacturing activities in the Chinese economy in January remained steady despite households celebrating the Lunar New Year festival.
The Nifty50 index is likely to remain extremely volatile as Indian Finance Minister Nirmala Sitharaman will dictate the Union Budget for FY2023-24. Defence and infrastructure stocks are likely to remain on the radar. Meanwhile, the US and India have come into a partnership to launch US-India Initiative on Critical and Emerging Technologies to compete against China on military equipment, semiconductors, and artificial intelligence (AI), as reported by Reuters.
On the oil front, oil prices have recovered dramatically as the Chinese economy is showing resilience after dismantling pandemic controls. The oil price witnessed a stellar buying interest after dropping below $77.00 and is now looking to extend its upside move above the immediate resistance of $79.50.