Asian Stock Market: Ignores lockdown fears, DXY skids, oil aims for $100.00

• Asian equities have jumped firmly as a correction in the DXY has underpinned the risk-on mood.
• Escalating lockdown fears in China have failed to strengthen bears.
• Oil prices are attempting to reclaim the psychological resistance of $100.00.

Markets in the Asian domain have surged firmly as slippage in the US dollar index (DXY) has underpinned the positive market sentiment. The DXY has slipped below the critical support of 107.00 in the Asian session after hitting a fresh 19-year high of 107.24 on Wednesday. The asset has surrendered the majority of its gains as the hawkish Federal Open Market Committee (FOMC) minutes have been discounted by the market participants.

At the press time, Japan’s Nikkei225 jumped 1.27%, China 50 gained 1.05%, and Nifty50 added 0.65% while Hang Seng eased 0.42%.

Only one FOMC member didn’t participate in supporting the announcement of 75 basis points (bps) rate hike. The guidance is hawkish as expected if higher price pressures persist for longer. The catalyst which is impacting the DXY prices is the downbeat US ISM New Orders Index data released on Wednesday. The economic data landed at 55.6, significantly lower than the estimates and the prior print of 62.1 and 57.6 respectively. The corresponding data reflects the forward demand by the households and the lower New Orders Index indicates lower demand ahead.

Meanwhile, Asian indices have ignored the soaring lockdown fears in China. The economy is facing the resurgence of Covid-19 again and again. This is dampening the sentiment of the market participants. No doubt, the restrictions on the movement of men, materials, and machines will halt the production process.

On the oil front, oil prices are attempting a rebound and a pullback move might lift them to near the psychological figure of $100.00. The escalating recession fears brought an extreme sell-off in the asset this week.