Asian Stock Market: Sell-off in US techs weighs on Asian indices, oil struggles around $79.00

• Investors dumped US technology stocks in anticipation of poor earnings and weak guidance.
• Japanese stocks remained positive as BoJ Ueda reiterates the need for an ultra-dovish monetary policy.
• South Korea’s KOSPI has witnessed an intense sell-off after mixed preliminary GDP data.

Markets in the Asian domain are facing immense selling pressure as a sell-off in United States technology stocks recorded on Monday ahead of their quarterly earnings. This week, investors will remain busy amid quarterly results from Amazon, Google, Meta Platforms, and Microsoft. Investors are worried that the impact of higher interest rates from the Federal Reserve (Fed) will be visible in their corporate earnings and they may also impact the revenue guidance.

S&P500 futures are showing significant losses in the Asian session after a choppy Monday, portraying caution among market participants. The US Dollar Index (DXY) has found an intermediate cushion around 101.20 after a rigorous sell-off. The downside in the USD Index seems favored as investors have digested anticipation of consecutive 25 basis points (bps) interest rate hike from the Federal Reserve (Fed).

At the press time, Japan’s Nikkei 225 gained 0.23%, Shanghai dropped 0.35%, Hang Seng plummeted 1.54%, KOSPI dived 1.78%, and Nifty50 remains flat.

Japanese stocks have hogged the limelight as investors are anticipating a continuation of the expansionary monetary policy stance from Bank of Japan (BoJ) Governor Kazuo Ueda. While speaking in the Japanese parliament on Tuesday, new BoJ Governor Kazuo Ueda said, “Trend inflation remains below 2% but gradually accelerating, which is partly due to the effect of monetary easing.” He further added, “It takes very long for the impact of monetary policy steps to appear on economy, prices.

South Korea’s KOSPI has witnessed an intense sell-off after mixed preliminary Gross Domestic Product (GDP) data. The South Korean economy has grown by 0.3% in the first quarter of CY2023 while the street was anticipating a growth rate of 0.2%. On an annual basis, the GDP has declined to 0.8% from the estimates of 0.9%.

On the oil front, oil prices are attempting to overstep the immediate resistance of $79.00. The oil price rebounded on Monday as investors believe that a steady interest rate guidance from the Fed will recede recession fears.