Asian Stock Market: Solid Fed’s rate hike pause bets improve market sentiment, oil rebounds sharply

Markets in the Asian domain are showing all-recovery strength as expectations for a pause in the policy-tightening spell by the Federal Reserve (Fed) are skyrocketing. The street is anticipating that Fed chair Jerome Powell will halt the rate-hike cycle to avoid the United States recession. Also, declining US inflation and Producer Price Index (PPI), and easing labor market conditions are supporting the context.

At the press time, Japan’s Nikkei225 jumps 0.73%, ChinaA50 climbs 0.70%, Hang Seng soared 2.19%, and Nifty50 gained 0.54%.

Japanese stocks have hogged the limelight after positive commentary from Japan’s Prime Minister Fumio Kishida. Japan’s PMI cited “We will endeavor to pull Japan out of deflation and attain private demand-driven economic growth.” Apart from that, Japan’s PM highlighted the need for the government and the Bank of Japan (BoJ) to closely coordinate for increasing economic policy. Also, Goldman Sachs stated solid fundamentals and expectations for structural changes justify a bullish stance on Japan’s equities.

Chinese equities are performing stronger as the economy is battling with the real estate crisis effectively. Meanwhile, Moody’s has changed China's property sector outlook to stable from negative on better sales and funding conditions. This has infused fresh blood into Chinese stocks. Going forward, China’s annual Retail Sales data will remain in the spotlight. April’s Retail Sales data is seen expanding by 20.1% vs. the prior release of 10.6%.

On the oil front, oil prices have recovered strongly to near $70.00 on hopes that a stable interest rate policy by the Fed will trigger the oil demand.