Asian Stock Market: Remains weak despite China’s progressive steps for easing Covid curbs

• Escalating anxiety among market participants amid the festive mood is impacting Asian equities.
• The US Dollar Index is looking to shift its auction profile above the crucial resistance of 104.00.
• Oil prices seem solid despite a correction as Russia has banned oil supply to G7 countries and European Union.

Markets in the Asian domain are facing selling pressure after S&P500 failed to carry-forwarded Friday’s revival move on Tuesday. Mild strength in the US Dollar Index (DXY) is indicating a recovery in the risk-aversion theme. The return on 10-year US Treasury bonds has marginally trimmed but is still solid around 3.85%.

At the press time, Japan’s Nikkei225 dropped 0.63%, ChinaA50 slipped 0.20%, Hang Seng jumped 2.38%, and Nifty50 remained flat.

Chinese equities have failed to capitalize on bold steps from China for reopening the economy despite a spike in Covid-19 cases. It seems that the pace adopted by the administration in reopening of the economy has spooked sentiment. The rollback of strict Covid-19 restrictions at a sheer pace has accelerated infections and medical agencies are failing to control the damage.

The move of scraping quarantine rules for inbound travelers to easy supply chain disruptions is not expected to be respected by other countries. Reuters reported that the United States is considering new Covid measures for travelers from China. “The US government may impose new COVID-19 measures on travelers to the United States from China over concerns about the "lack of transparent data" coming from Beijing, U.S. officials said on Tuesday” mentioned the news.

Meanwhile, the return of the Bank of Japan (BOJ) policymakers to lose monetary policy after scrutinizing the summary of opinions to accelerate wages further to achieve 2% inflation has weakened Japanese stocks. The move will depreciate the Japanese yen again and the firms will be forced to pay higher for bringing foreign inputs.

On the oil front, the oil price has turned sideways after dropping from the crucial resistance of $81.00. Bullish sentiment for the oil price is still solid as Russia has announced a ban on the supply of oil to G7 countries and the European Union for levying a price cap.