Asian Stock Market: Mildly bullish amid risk-on impulse, DXY near three-week low, oil drops

• Asian indices are performing better as subdued DXY and oil soar market mood.
• Chinese equities are positive despite the downbeat Caixin Manufacturing PMI data.
• Oil prices are continuously dropping after the EIA reported higher oil stockpiles last week.

Markets in the Asian domain are performing better on positive cues from the global indices. The Asian indices have followed the optimism displayed by Wall Street on Friday and are scaling higher. A risk-on impulse in the global market has improved the risk appetite of safe-haven-assets.

At the press time, Japan’s Nikkei225 added 0.60%, China A50 gained 0.50%, Nifty50 jumped 0.61%, and Hang Seng remained flat.

Chinese equities are performing better despite the release of the downbeat Caixin Manufacturing data. The economic data has landed at 50.4, lower than the estimates of 51.5 and the prior release of 51.7. The Chinese economy was operating with restricted economic activities in July due to the resurgence of Covid-19.

Meanwhile, the US dollar index (DXY) is displaying a subdued performance as investors see downbeat US ISM Manufacturing PMI data. The economic data is seen at 52, lower than the prior release of 53. However, the US ISM New Orders Index data is expected to report a stellar performance.

The US ISM New Orders Index is seen at 52, significantly higher than the prior release of 49.2. The corresponding data reflects the forward demand by the households and eventually, a higher New Orders Index indicates higher demand ahead.

On the oil front, declining oil prices have also supported the Asian indices. Oil prices have turned sideways but remain below $97.00 and are expected to remain vulnerable. The black gold is scaling lower from the past week after the Energy Information Administration (EIA) reported oil stockpiles last week. The EIA reported a fall in oil inventories by 4.5 million barrels last week.