Asian Stock Market: Enjoys ball amid global market optimism, oil drops as China tightens Covid curbs

• Asian stocks have advanced following the footprints of the S&P500.
• Rising odds for a decline in Fed’s rate hike pace have impacted the DXY.
• Oil prices have corrected amid rising fears of a slowdown in China’s oil demand.

Markets in the Asian domain are enjoying interest from investors amid optimism in global markets. Indices in Asia are following the footprints of the upbeat S&P500 witnessed on Friday. US 500-stock basket received an overwhelming response from the market participants after Chicago Fed Federal Reserve (Fed) President Charles L. Evans provided a less-hawkish commentary on interest rate guidance.

At the press time, Japan’s Nikkei225 jumped 1.27%, ChinaA50 gained 0.38%, Hang Seng soared 3.81% and Nifty50 gained marginally by 0.17%.

Fed policymaker advocated for smaller rate hikes ahead as more policy tightening measures ahead could impact heavily on growth rates. The deviation between the required interest rate and the current one is extremely lower, therefore a slowdown in the pace of rate hikes looks imminent. The commentary has impacted the US dollar index (DXY) severely. The mighty DXY is hovering marginally above 111.00, at the time of writing.

Meanwhile, Chinese equities are less performing against other Asian indices on weaker Trade Balance data. The exports rose by 7.0% last month vs. 14.8% expected and 10.7% previous while, imports climbed by 6.8% vs. 6.0% expected and 5.2% the prior release. Activities in the Chinese economy have dropped leading to strict Covid-19 measures. Restrictions on the movement of men, materials, and machines to contain the pandemic mess have trimmed the extent of economic activities.

On the oil front, oil prices have dropped to near the psychological support of $90.00 as rising Covid-19 curbs by China have accelerated fears of a decline in oil demand. It is worth noting that China is a leading importer of oil and a decline in China’s oil demand could bring vulnerability to oil prices.