ASIAN STOCK MARKET: SHANGHAI SOARS AS PBOC PROMISES PRUDENT POLICY, OIL REMAINS UNDER PRESSURE

Markets in the Asian domain are showing country-specific action. Volatility in Asian stocks seems higher despite S&P500 remaining less volatile on Friday. US equities remained choppy but settled Friday’s session with some losses. Investors remained cautious about S&P500 as the Federal Reserve (Fed) is expected to continue its policy-tightening spell to its May monetary policy, citing that United States core inflation is extremely persistent.

The US Dollar Index (DXY) is showing signs of loss in the upside momentum after printing a high of 101.80. The upside in the USD Index seems capped due to the release of the weak US retail demand data. Retail Sales data contracted by 1.0% against expectations of 0.4% reported earlier as households postponed demand for goods with high price tags to avoid the higher cost of financing.

At the press time, Japan’s Nikkei225 remains flat, ChinaA50 soars 1.10%, Hang Seng gained 0.62%, and Nifty50 tumbled 1.10%.

Chinese stocks are skyrocketing as the People’s Bank of China (PBoC) has promised a prudent monetary policy to trigger domestic demand. Chinese inflation has been softening over the past few months despite the reopening of the economy after the rollback of pandemic controls. The PBoC is focusing on expanding retail demand as it will increase the confidence of consumers in the economy.

Meanwhile, economist at UOB Group Ho Woei Chen reviewed the latest trade balance figures in China. He stated, “Exports unexpectedly surged in Mar while imports were less robust but still came in above consensus expectation. China’s shipments improved amid the normalization of domestic production and stronger demand from the Asian and European markets.”

Japanese markets have turned choppy after a rally of a few trading sessions. The expectations of the continuation of expansionary policy from the Bank of Japan (BoJ) strengthened equities.

On the oil front, a recovery in the US Dollar has weighed pressure on the oil price. The black gold is hovering around $82.70.