Asian Stock Market: Recovers early losses as S&P500 revives on subdued DXY, oil stabilizes

Markets in the Asian domain have recovered a majority of their losses as overnight S&P500 futures have turned positive after a third consecutive decline on Tuesday. Asian equities are also responding to their respective economic data as Japan's Retail Trade data and China’s PMI have been released. Also, the US dollar index (DXY) is displaying a subdued performance ahead of US Automatic Data Processing (ADP) Employment Change data.

At the press time, Japan’s Nikkei225 0.52%, Hang Seng surrendered 0.46%, however, China A50 added 0.26%. Indian indices are closed on account of Ganesh Chaturthi.

After a gap-down opening, Japanese equities have recovered a majority of their losses amid upbeat Retail Trade data. Retail Trade data have improved to 2.4%, higher than the expectations of 1.9% and the prior release of 1.5% on an annual basis. Also, the monthly economic data has advanced to 0.8%. Meanwhile, the Industrial Production data has landed higher at 1.8% than the expectations and the former release of -2.6% and -2.8% respectively.

Meanwhile, the world’s second-largest economy, China is trading positive after firmer official manufacturing data. China’s NBS Manufacturing PMI has landed at 49.4, higher than the estimates of 49.2 and the prior release of 49.0. Also, the Non-Manufacturing data has released higher at 52.6 vs. the consensus of 52.2 but remained higher than the prior release of 53.8.

Losses in US tech stocks on Tuesday forced a third consecutive decline in Wall Street. As per the consensus, the US ADP is expected to report job additions by 200k, against 528k job additions reported in July. Investors believe that a halt in the recruitment process by various tech giants is responsible for a decline in additional jobs forecast. Also, it indicates a slowdown in the US economy.

On the oil front, oil prices have corrected to near $92.00 after a firmer rally. As demand is expected to remain downbeat amid the consequences of restrictive monetary policy by western central banks, investors are focusing more on production cuts announced by OPEC to fix the price imbalance. The oil prices are expected to revive firmly ahead.