Asian Stock Market: Mixed ahead of US NFP, falling oil prices

• Chinese indices are outperforming despite a downbeat Caixin Manufacturing PMI.
• Falling oil prices are likely to support the oil-importing nations going forward.
• The spotlight will remain on US NFP, which will be released in the early American session.

Markets in the Asian domain are reflecting a mixed response on Friday as Japan’s Nikkie225 and Hang Sang are showing rough responses while Chinese markets and Indian bourses are attracting bids.

At the press time, Japan’s Nikkie225 sheds 0.50%, Hang Seng eases 1%, while India’s Nifty50 jumps 0.50% and ChinaA50 spikes 1.80%.

Chinese markets are outperforming in the Asian region despite the downbeat Caixin Manufacturing Purchase Managers Index (PMI) figures. The IHS Markit has reported the Caixin Manufacturing PMI at 48.1 much lower than the market consensus of 49.7 and the previous figure of 50.4. It seems that the Chinese markets have already discounted the plunge in the economic data and are following a ‘buy on rumor and sell on news’ indicator.

Oil prices nosedived more than 6% on Thursday after US President Joe Biden announced a release of one million barrels per day for six months out of their Strategic Petroleum Reserve (SPR) from May. The announcement of 180 million barrels of oil release by the SPR is going to bring some price stability in the oil market and henceforth a relief for the commodity importing countries.

Going forward, the spotlight will remain on the US Nonfarm Payrolls (NFP), which will be released on Friday. The market estimates of 490k against the earlier print of 678k is indicating an underperformance on the payrolls front, which may also affect the likely monetary policy action from the Federal Reserve (Fed). Meanwhile, CME Group's FedWatch tool is showing 71% odds of a half-point rate increase by the Fed.