Asian Stock Market: Traces recovery in S&P500 futures, oil struggles around $80.00

Chinese stocks have displayed a responsive buying action after an upbeat Caixin Manufacturing PMI data.
Japanese markets are closed on account of the Market Holiday.
Oil price is struggling to sustain above $80.00 amid ambiguity in the sentiment of market participants.

Sagar Dua FXStreet

Markets in the Asian domain have followed the footprints of S&P500 futures as the latter recovered sharply in early trade. United States equities futures have recovered their entire losses delivered in early Asia, portraying a recovery in the risk appetite theme.

At the press time, Shanghai gained 0.55%, Hang Seng jumped 1.66%, and Nifty50 remained flat. Japanese markets are closed on account of the Market Holiday.

Chinese stocks have witnessed a responsive buying action after the release of better-than-expected Caixin Manufacturing PMI data. After the release of downbeat China’s official Manufacturing PMI data and the vulnerable Covid-19 situation, market participants were expecting a sheer drop in the extent of manufacturing activities. However, the economic data has been released at 49.0 higher than the projections of 48.8.

Caution in the Chinese market still persists as the epidemic situation has gone beyond the control of medical authorities. Analysts at Capital Economics have warned that "China is entering the most dangerous weeks of the pandemic". The Covid-19 situation in China is expected to get vulnerable further as infections get accelerated while celebrations of the Lunar New Year.

The US Dollar Index (DXY) has refreshed its day’s low at 103.15 after failing to capitalize on the firmer opening move. The USD index is likely to remain on tenterhooks ahead of the release of the United States ISM Manufacturing PMI data. As per the consensus, the economic data is seen lower at 48.5 vs. the former release of 49.0.

On the oil front, oil prices are struggling to sustain above the crucial resistance of $80.00. Investors are confused about whether to support oil price after considering the long-term benefits of China’s reopening or to punish the black gold due to short-term pain in China’s oil demand led by accelerating Covid-19 cases.

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.

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