Asian Stock Market: Indices extend recovery as US Banks ace stress test, oil prices steady

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  • A decent performance from US Banks on their fundamental aspect has strengthened the global equities.
  • Stability in Japan’s inflation has supported the respective indices.
  • The DXY is expected to remain sideways amid a light economic calendar

Markets in the Asian domain have extended their recovery on Friday as sound financials of the US banks have brought a sense of optimism to the global economy. The US banks have aced their stress test considering their solid Capital Adequacy Ratio (CAR) and lower non-performing assets (NPA) ratios. A rock-solid condition of the lenders in the US economy is sufficient to bolster the sentiment of the market participants.

At the press time, Japan’s Nikkei225 jumped 1.24%, China A50 added 0.68%, Hang Seng surged almost 2%, and Nifty50 gained 0.85%.

Stability in Japan’s inflation figures has supported the respective indices. Investors were worried due to the preliminary estimates of the Consumer Price Index (CPI) figures as the consensus was displaying a divergence in the overall annual CPI and core CPI. Although the figures have remained in line with their prior releases. Sustainability in the CPI figures indicates that costly oil and food prices have not elevated their impact on the overall inflation. It is worth noting that the overall CPI is landed at 2.5% and the core CPI that excludes oil and food prices have released at 0.8%. One could deduce that price rises in the Japanese economy are majorly guided by the oil and food price rise.

Meanwhile, the US dollar index (DXY) has witnessed a minor rebound after a corrective move to 104.20. The DXY is expected to remain lackluster amid the unavailability of any potential trigger for a decisive move.