Asian Stock Market: Tumbles on firmer recovery in DXY, oil records first monthly decline

• Asian equities have tumbled amid a strong rebound in DXY ahead of US ISM PMI.
• Oil prices have recorded their first monthly loss after a spell of six monthly gains.
• Chinese equities have displayed less underperformance on the upbeat Caixin Manufacturing PMI data.

Markets in the Asian domain have witnessed a steep fall as the US dollar index (DXY) has rebounded formerly in the Asian session after a sheer downside move on Thursday.  The DXY tumbled after failing to recapture a 19-year high at 105.79. However, a decent recovery in the asset has driven it to near the critical resistance of 105.00.

At the press time, Japan’s Nikkei225 tumbles 1.86%, China A50 eased 0.67%, Hang Send slipped 0.62%, and Nifty50 surrendered 1.44%.

Chinese equities have fallen less in proportion to other indices amid the upbeat Caixin Manufacturing Purchase Managers Index (PMI). The economic data has landed at 51.7, higher than the estimates and the former release of 50.1 and 48.1 respectively. A higher-than-expected economic data indicate that the production activities are operating at a decent pace and the aggregate demand for the manufactured products is advancing firmly.

On the oil front, escalating recession fears have overshadowed the supply worries again. The black gold has recorded monthly losses for the first time after a spell of six monthly gains. Western central banks have ridiculously trimmed their demand forecasts amid advancing price pressures. The households in the western countries are facing the consequences of a real income shock. Higher price pressures have lowered their ‘paychecks’ and henceforth the overall spending quantity-wise.

For further guidance, the US Institute of Supply Management (ISM) PMI data will be of utmost importance. As per the preliminary estimates of 55 vs. 56.1 previously reported, an underperformance is expected by the market participants.