Asian Stock Market: Traces the rebound in Wall Street, Shanghai parts ways
- Asian markets are recovering after a decent correction, following a revival in the US markets.
- Chinese indices are trading lower as the PBOC kept LPR unchanged.
- Risk-on impulse has dented the demand for the DXY, yields fall.
Markets in the Asian domain rebound sharply on Wednesday after remaining vulnerable in the last few trading sessions. Asian indices are experiencing a decent bounce back led by a strong revival in the US indices. It seems that the risk-off impulse, which arises from the uncertainty over the likely aggressive interest rate decision by the Federal Reserve (Fed), is fading away.
At the press time, Nikkie225 jumped 0.90%, Hang Seng added 0.70%, and Nifty50 gained 0.95%. However, Chinese indices are trading lower.
Indices in China are subdued on Wednesday after the People’s Bank of China (PBOC) surprisingly left interest rates unchanged. The PBOC kept its one-year loan prime rate (LPR) unchanged at 3.70% and its five-year loan prime rate unchanged at 4.60%. A reduction in the borrowing rates was highly expected by the market participants, which has resulted in a sell-off in the Shanghai and SZSE Component.
Meanwhile, the US dollar index (DXY) has displayed a decent pullback in the Asian session after failing to cross the barricade of 101.00. The DXY has tumbled to near 100.70 as investors shrug off the fears of a tight policy environment. Also, the 10-year US Treasury yields are facing resistance while kissing the 3% figure. Going forward, markets will dance to the tunes of insights from the speech of Federal Reserve (Fed)’s Jerome Powell, which is due on Thursday.
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.
