Asian Stock Market Recovers Amid Less Hawkish Fed Policy and Oil Price Struggles

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Asian Stock Market Recovers Amid Less Hawkish Fed Policy and Oil Price Struggles

Asian stock markets are showing signs of recovery after falling in recent weeks. The recovery is partly due to efforts to revive the banking sector, with institutions working to fade fears over global banking turmoil. In the Eurozone, UBS has agreed to acquire Credit Suisse for $3.2 billion in a rescue deal, and various financial institutions have pumped $30 billion into First Republic Bank to save it from collapse.

Despite this influx of liquidity, Standard and Poor has downgraded the creditworthiness of the mid-sized United States bank, citing concerns that promised helicopter money won't be enough to solve its problems. However, ChinaA50 has jumped 0.60%, Hang Seng has inched up by 0.08%, KOSPI has gained 0.31%, and Nifty50 has added 0.36% at press time.

The upcoming Federal Reserve policy announcement is causing uncertainty and squeezing volatility in the market. Investors are closely watching the announcement, with more than 70% odds favoring a 25 basis point interest rate hike on Wednesday, according to the CME Fedwatch tool. However, Goldman Sachs is expecting a pause in the policy-tightening spell considering the stress in the banking system.

In terms of the oil market, prices have recovered after hitting a fresh 15-month low below $65.00. However, the oil price is struggling to extend its recovery above $68.00. The upside looks solid, and a recovery in oil prices is expected amid expectations that OPEC might intervene to support prices.

Despite the optimism, the global banking turmoil is still a concern, and investors are closely monitoring the situation. As per Goldman Sachs, a steady Fed policy is favored, considering the rising stress in the banking sector. Investors are looking for signs of stability and hoping for a return to normalcy in the near future.

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