Asian Stock Market: Caution deepens amid a further delay in US debt-ceiling issues, oil consolidates

• Asian markets are cautious as US debt-ceiling negotiations ended without any agreement.
• The USD Index has turned sideways around 103.30 as investors are confused about further action in the FX domain.
• Japanese equities have failed to capitalize on strong May PMI numbers.

Markets in the Asian domain are cautious as US debt-ceiling negotiations ended without any agreement that has pushed the United States economy further towards a default situation. The street was anticipating a decisive outcome of US Biden-McCarthy talks as the US borrowing cap issues have reached do-or-die time.

At the press time, Japan’s Nikkei 225 dropped 0.55%, ChinaA50 tumbled 0.88%, Hang Seng slipped 0.45%, and Nifty50 gained 0.47%.

The US Dollar Index has turned sideways around 103.30 as investors are confused about further action in the FX domain. The street is baffled about whether to support the USD index after hawkish commentaries from Federal Reserve (Fed) policymakers or to punish it due to further delay in US borrowing cap issues.  An absence of selling action in the USD Index indicates that investors are confident that the US debt-ceiling will get raised ahead.

Japanese equities have failed to capitalize on strong PMI numbers. Manufacturing PMI jumped to 50.8 vs. the estimates of 49.5 while Services PMI soared to 56.3 against the estimates of 55.2. The Japanese economy is showing resilience as PMI numbers have soared after a significant expansion in Q1 Gross Domestic Product (GDP).

Chinese stocks are facing heat despite positive development in US-China trade relations. China's Commerce Minister Wang Wentao hosts a seminar for US firms investing in China on Monday and promised to provide accurate and efficient service guarantees for foreign-funded enterprises.

On the oil front, the oil price is facing barricades around $72.50 amid a further delay in US dent-ceiling negotiations.