Asian Stock Market: Subdued on firmer DXY, Shanghai reopens, China PMI outperforms – FXStreet

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  • Asian equities are trading mixed as DXY strengthens on hawkish Fed bets.
  • The re-opening of Shanghai after a two-month lockdown may bolster the economic activities.
  • Chinese equities have failed to capitalize on strong PMI numbers.

Markets in the Asian domain are displaying a subdued performance as the US dollar index (DXY) is performing stronger on expectations of a hawkish stance from the Federal Reserve (Fed) in its June monetary policy meeting. Higher price pressures have raised concerns over the aggregate demand in the US economy. To accelerate the growth prospects, the Fed will do whatever it takes to combat the galloping inflation.

For sure, the deployment of material quantitative measures will be required and elevation of interest rates at a quicker pace will be observed. Therefore, the DXY has regained its glory and is advancing higher. The DXY has touched an intraday high of 102.00.

At the press time, Japan’s Nikkei225 added 0.60%, China A50 eased 0.12%, Hang Seng tumbled 0.62% and the Nifty50 displayed at par performance.

Chinese equities are not performing well despite the re-opening of Shanghai after a two-month lockdown imposed by the Chinese administration to contain the spread of the Covid-19. The administration has withdrawn restrictions on the movement of men, materials, and machines, therefore investors could expect a rebound in the volume of economic activities. Also, the respective indices failed to capitalize on the upbeat Caixin Manufacturing PMI. The IHS Markit has reported the PMI data at 48.1, which has outperformed the consensus of 47 and the prior print of 46.

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