- Asian equities are performing broadly well after following the footprints of Wall Street.
- An upbeat US ISM Services data has strengthened the risk-on market mood.
- Oil prices are declining led by the cumulative impact of various supply catalysts.
Markets in the Asian domain are broadly positive, following the footprints of bullish Wall Street after the release of the US ISM Services PMI data. The economic data landed at 56.7, higher than the estimates of 53.5 and the prior release of 55.3. Also, the US ISM Services New Orders Index was released at 59.9, lower than the consensus of 60.5 but remained solid than the former release of 55.6.
The upbeat US ISM Services economic data indicated that the demand is resilient and sent the tech stocks on fire. This tech-savvy index NASDAQ rose 2.59% and improved the risk appetite of investors swiftly.
At the press time, Japan’s Nikkei225 and China A50 added 0.50%, Hang Seng jumped 1.70%, and Nifty50 gained 0.80%.
Indian indices are likely to remain on tenterhooks as the Reserve Bank of India (RBI) will announce the interest rate decision. RBI Governor Shaktikanta Das is expected to hike the repo rate by 50 basis points (bps). A rate hike of 50 bps will push the repo rate to its pre-pandemic levels at 5.40%, which was earlier recorded in August 2019.
Meanwhile, the US dollar index (DXY) is finding a cushion around 106.40. The DXY is likely to remain on the sidelines ahead of the jobs data. Economists at JP Morgan predict the US Nonfarm Payrolls (NFP) to come in weaker at 200K in July’s labor market report.
On the oil front, higher oil stockpiles buildup reported by the Energy Information Administration, a promise of pumping more oil by the OPEC+, and a soaring demand crisis have sent the oil prices into a bearish trajectory. The oil prices have fallen to near the psychological support of $90.00.