Markets in the Asian domain have rebounded as dip-buying has kicked in after a bearish Wednesday. Asian equities have witnessed a responsive buying action, which dictates that the indices are extremely oversold and are a value-bet now.
At the press time, China A50 jumped 0.53%, Hang Seng gained almost 1%, and Nifty50 added 0.69% while Japan Nikkei225 eased 0.34%.
Federal Reserve (Fed) chair Jerome Powell’s testimony has infused fresh blood into the risk-perceived assets. Investors have ignored the hawkish guidance for July monetary policy but have focused on the statement that the US economy is strong enough to face the consequences of higher interest rates. Thanks to the upbeat growth prospects and tight labor market, which are acting as supportive catalysts for the Fed to tighten the policy without much hesitation.
The Japanese markets have diverged from the positive Asian indices amid mixed Purchase Managers Index (PMI) data. The Services PMI has landed at 54.2, significantly higher than the estimates and the prior print of 52.2 and 52.6 respectively. While the Manufacturing PMI has slipped to 52.7 from the consensus of 54.4 and the former figure of 53.3.
Going forward, investors’ focus will remain on the US PMI. As per the market consensus, the Manufacturing PMI is expected to slip to 56 from the prior print of 57. While the Services PMI may advance marginally to 53.5 from the former figure of 53.4.
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