Asian Stock Market: Mostly bearish amid volatility inspired by quarterly result season, oil attempts recovery

• Asian stocks are majorly bearish as the quarterly result season has kicked off worldwide.
• Japanese equities are showing resilience after the BoJ announced anticipation for Japan’s inflation in a 1.6-1.9% range for CY2025.
• Chinese indices failed to capitalize on upbeat GDP and Retail Sales data.

Markets in the Asian domain are mostly bearish as investors are worried about earnings season amid a quantitative tightening environment. S&P500 ended Monday’s session on a mildly positive note after finding support from the banking sector. However, a sell-off in tech-giant Google kept upside capped. Tech-giant Google witnessed a sheer sell-off after reports that South Korea's Samsung Electronics was considering replacing Google with Microsoft-owned Bing as the default search engine on its devices.

The US Dollar Index (DXY) has shown a minor correction after a sheer recovery and is defending the immediate support of 102.00. Investors channelized their funds in the USD Index as chances for more rate hikes from the Federal Reserve (Fed) are extremely solid despite loosening labor market conditions and softening inflationary pressures.

At the press time, Japan’s Nikkei225 jumped 0.40%, SZSE Component dropped 0.18%, Hang Seng tumbled 0.80%, and Nifty50 slipped 0.28%.

Japanese stocks are showing resilience after the Bank of Japan (BoJ) announced anticipation for Japan’s inflation in a 1.6-1.9% range for CY2025. This has postponed consideration of an exit from the decade-long ultra-loose monetary policy. Also, a further tweak in Yield Curve Control (YCC) seems out of the picture. It seems confirmed that the pipeline of monetary stimulus will remain active to support the overall demand.

Chinese equities are struggling to gain traction despite the release of upbeat Gross Domestic Product (GDP) and Retail Sales data. China’s GDP has expanded by 2.2% in the first quarter of CY2023 as expected by the market participants. On an annual basis, China’s growth rate data has soared to 4.5% vs. the expectations of 4.0% and the former release of 2.9%. Apart from that, Retail Sales data has jumped dramatically to 10.6% against 7.4% as expected.

On the oil front, oil prices remained under pressure after a solid recovery in the USD Index. The black gold has shown some recovery after upbeat China economic data. It is worth noting that China is the leading importer of oil in the world and economic recovery in China supports recovery in oil demand.