Asian Stock Market: Indices rebound on positive Wall Street, PBOC maintains status quo
- Asian stocks have rebounded after tracking positive cues from Wall Street.
- Chinese indices have secured gains despite an unchanged PBOC policy.
- Oil prices have recaptured the hurdle of $85.00 ahead of Fed policy.
Markets in the Asian domain have rebounded sharply after plummeting on Monday. Asian indices are following the cues from Wall Street and are trading in the positive territory ahead of the interest rate decision by the Federal Reserve (Fed). Investors have shrugged off the clouds of uncertainty over the Fed meeting as a rate hike is expected, however, the extent could accelerate further.
At the press time, Japan’s Nikkei225 and ChinaA50 added 0.43% while Hang Sang jumped 1.37%.
Chinese equities are holding gains despite the maintenance of the status quo by the People’s Bank of China (PBOC). The central bank has kept its one-year and five-year Prime Lending Rate (PLR) unchanged. A rate cut was expected by the market participants as the economy is strict on its path of spurting the growth rate. Also, China’s inflation rate slipped in August, which bolstered the expectations of a dovish stance.
Meanwhile, Japan’s Ministry of Finance (MOF) has promised additional spending of 3.48 trillion yen in budget reserves to cope with price hikes and covid-19, news wires from Reuters. An improvement in price pressures will surely delight the Bank of Japan (BOJ) as the central bank is facing the headwinds of prolonged depreciation in the domestic currency.
On the oil front, oil prices have recaptured the critical resistance of $85.00 despite soaring odds of a bumper rate hike by the Federal Reserve (Fed). Squeezing liquidity from the economy will have a significant impact on oil demand. In spite of this fact, investors are pouring funds into black gold.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
