Asian markets opened flat as the debt ceiling deal is awaited to pass in the house of representatives and the senate and the U.S. markets being closed on memorial day
As Republican congressional leaders and the White House intensified their lobbying efforts to ensure that Congress approves a debt-accord to prevent a US default, Asian stocks were set for a cautious opening on Tuesday.
The smallest moves are predicted by futures for Japan and Australia, which will open their markets, while more declines are predicted by futures for Hong Kong. A crucial indicator of Chinese stock prices is on the verge of entering a bear market as investors withdrew amid a shaky economic recovery, rising geopolitical tensions, and a weaker yuan.
Japan’s Nikkei slipped 0.28% , after the index reached an all time high since July 1990. Along with U.S. debt deal talks, weak yuan is also considered as a reason for the strong index. The USD/JPY dropped to around 140. The debt ceiling deal and the Fed June meet will be the driving factor for USD/JPY in the upcoming days.
On Tuesday morning, the Hang Seng Index is down by 0.34% as investors remain uncertain about the Chinese economy. Fears of covid returning to the country will keep investors reluctant from the dragon’s stock market.
The Australian market at noon AEST had a muted start. The S&P 200/ASX index was down by 2.0 points to 7215.4 by 0.03%.
Analyst Josh Gilbert commented that after a strong rally in the previous session, it seems to be a muted day for the Australian market. He said that since the wall street was shut due to memorial day, it was difficult for Australian Securities Exchange (ASX) to find a direction with no economic news.
Indian market also open flat but defy Asian markets
The Indian markets opened on a flat start on Tuesday morning as the Sensex slipped by 57.48 points to 62,788.90 down by 0.09%. On the other hand, the Nifty index started down by 8.10 points or 0.04% at 18,590.60. After these openings, the indices started gaining positions eyeing at all time high.
Investors forecast the indices to remain slightly green on today’s session as they are already on a high winning streak. In the previous trading session, the sensex had gained 344 points closing at 62,846 while the Nifty 50 gained 99 points closing at 18,598.
Debt deal yet to pass in both house of congress
The U.S. debt deal agreement between president Joe Biden and republican house speaker Kevin McCarthy is yet to be passed in the house and senate. Some republicans and democrats who are angry about the bill have been opposing it since the agreement in principle was reached. A group of republicans think that there are less spending cuts in the bill and might oppose it during the vote which is expected to take place this week. However, there is high confidence in both the houses that the bill will pass and reach the table of the president.