Asian stocks are up on China tech stocks and crude surge. As markets take in the crude rally and China’s tech boom, Asian stocks begin to rise.
Asian stocks markets are cautious, but softer US inflation figures
Despite a spike in oil prices, markets remained cautious about a possible rise in inflation over the upcoming months. As the majority of Asian stocks edged up on Monday as risk appetite continued in response to milder-than-expected U.S. inflation numbers
A private survey revealed that development in China’s manufacturing sector slowed in March compared to the previous month. But markets looked to have mostly ignored this information. A post-COVID revival of the economy seems to be losing traction s China’s industrial sector encounters more challenges due to weak demand.
China stocks soar, Hang Seng fell on Monday
After Beijing launched a probe into local sales of American memory chip manufacturer Micron Technology Inc. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes increased by 0.9% and 0.6%, respectively. These gains were primarily driven by shares of key electronics manufacturers. (NASDAQ: MU).
Any hiccups in Micron’s Chinese sales allow local competitors to enter the market. Although China’s probe indicates that trade relations between Beijing and Washington are getting worse. Semiconductor Manufacturing International Corp (HK:0981) and SG Micro Corp (SZ:300661), two significant Chinese chipmakers, saw their shares rise by over 2%.
The most significant decline in Hong Kong’s Hang Seng index was seen in local technology companies. The majority of which also have U.S. listings. The Nikkei 225 indicator of Japan increased by 0.5%. While the Nifty 50 and BSE Sensex 30 indexes of India both increased by 0.2 percent. Australia’s ASX 200 increased 0.6% on speculation that the Reserve Bank will stop raising interest rates.
Crude oil surge as OPEC cut oil production
In a move that could push up prices around the world. Saudi Arabia and other significant oil producers (OPEC) on Sunday unexpectedly reduced production by up to 1.15 million barrels per day. Increased oil prices would increase the wealth of Russian President Vladimir Putin as his nation fights Ukraine. Which may drive Americans and others to spend even more at the pump due to global inflation.
Additionally, it was likely to fuel tensions with the US, which has urged Saudi Arabia and other allies to increase output. Due to the unexpected output reduction declared by OPEC+ over the weekend. Crude oil prices rose by over 8% on Monday morning. After oil increased by over 9% last week, there has been an explosive rise.
Asai FX: As the price of oil increases, inflation worries increase and the dollar rises in Asia.
The dollar index and dollar index futures both increased by 0.5% as the dollar strengthened significantly against a group of currencies. The sudden drop in output by over 1 million barrels a day by OPEC and its allies coincided with an increase in oil prices.
Following the first weekly gain in five weeks. As investors maintain control of USDJPY as it rises to a new intraday high near 133.50.
The Japanese yen fell 0.5% as news that the nation’s manufacturing sector continued to shrink through March. Which forced other Asian currencies to decline. The biggest producers in the nation’s capital expenditure also came in lower than anticipated in the initial quarter of 2023.
