Asian stocks followed the S&P 500 as the US 500 basket staged a solid recovery since Thursday. The remarkable recovery in US equities came after investors shrugged off the risk of a global banking crisis and cheered rising expectations of a smaller rate hike by the Fed.

Asian Stocks Today

 

 

Based on a report from fxstreet.com, the DXY index corrected sharply below 104.10 as the appeal of safe haven assets was dramatically reduced. The strong buying interest in global equities indicates an increase in risk appetite among market players. At the time of this news, Japan's Nikkei225 rose to 1.14%, ChinaA50 also rose by 1.33%, Hang Seng jumped 1.72%, and Nifty50 added 0.50%. Stocks in China strengthened ahead of the PBoC interest rate decision to be announced on Monday. Considering the stimulus requirements to stimulate overall demand in the Chinese economy after they managed to control the pandemic and further expansionary monetary policy is expected. Economists at UOB Group suggest that the PBoC could lower the loan prime rate (LPR) for its next meeting on March 20. They further added that there is a need for further support measures for the real economy and for the 5-year LPR to be lowered to boost housing demand.


They also see a possibility of the 1-year LPR dropping to 3.55% and the 5-year LPR to 4.20% for March, following the NPC. Meanwhile, Japanese equities rallied as former BoJ Governor Haruhiko Kuroda advocated for further rate cuts. Investors should be aware of the fact that the BoJ’s interest rate is already negative, and further rate cuts provide more stimulus needed to trigger more demand. The Silicon Valley Bank’s withdrawal has fueled demand for the safe-haven Yen. According to a Bloomberg report, hedge funds held their largest bearish Yen positions in six months last week. The painful trade caused by the SVB withdrawal has suddenly boosted demand for the Japanese currency. On the oil front, oil prices surged $69.00 as Goldman Sachs revised China’s 2023 GDP growth upward to 6.0%, signaling more demand for oil going forward. The investment banking firm had previously projected a growth rate of 5.5%.


also read :

Asian Stocks Fall as U.S., European Banks Heat Up

 


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