- Risk-off impulse has weighed pressure on the Asian equities.
- Chinese equities turned negative on mixed Trade Balance data.
- Oil prices to march higher despite the OPEC's promise of more oil supply.
Markets in the Asian domain are trading sharply lower as strengthening expectations of one more rate hike by the Federal Reserve (Fed) in June has underpinned negative market sentiment. Tightening the interest rates at a much higher pace is raising concerns over the growth rate going forward. An extreme liquidating tightening measure will absorb liquidity from the economy, and henceforth, difficulty in tapping funds for investment by corporate will dent the employment levels and aggregate demand.
At the press time, Japan’s Nikkie225 plunges 2.20%, China A50 sheds 1.21%, Hang Seng nosedives 3.81% and India’s Nifty50 erased 1.5%.
Chinese markets have plunged sharply despite a flat-to-positive opening on Monday. Lower than expected trade balance for April has brought a sell-off in the Chinese equities. China's Trade Balance for April, in Yuan terms, came in at CNY325.08 billion versus CNY441.88 as expected. While the exports rose by 1.9% last month against the consensus of 16.4%.
Oil prices have recovered their entire losses recorded in the early Asian session. This has also weighed pressure on the Asian equities, being a major importer of oil in the entire world. The unreliable promise of pumping more oil into the global supply failed to push the oil prices lower. The OPEC cartel has promised t pump more oil, but some nations cannot provide the discussed inventories. Also, banning oil from Russia has raised concerns over supply worries.
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