Asian markets turn positive on peace talks between Russia and Ukraine
- Asian markets have rebounded after witnessing a bloodbath last week.
- The risk-on impulse has returned as a repulsive buying, not a reversal.
- The odds of sellers returning to their terminals are very high.
The vulnerable Asian markets have turned positive this week after the turmoil seen in the last week of February. The escalation in the Russia-Ukraine war forced the market participants to ditch the risk-sensitive assets and park their funds into safe-haven assets. Asian stocks take the bullet and nosedive strongly.
The chatters between the Kremlin and Ukraine on Monday to ceasefire brought a fresh wave of risk-on impulse in the market. Although the negotiations ended without any outcome, an initiative for a truce had been welcomed by the market.
Moreover, China’s upbeat Caixin Manufacturing PMI has also supported the Asian markets. The Caixin Manufacturing PMI has printed at 50.4 higher than the previous print of 49.1 and market estimates of 49.3. Despite the lower economic activity in China during the Lunar New Year when factories remain closed, Jinping’s economy has outperformed.
However, the recent surge in the Asian markets should be tagged as repulsive buying, not a reversal. The world is now aware of the arbitrariness of Russian President Vladimir Putin and the man is not going to give up easily despite building up sanctions from the Western leaders. The isolation of Russia from the SWIFT international banking system has crippled its economy by restricting its oil and energy exports.
If any positive development relating to a ceasefire between Russia and Ukraine flashes then the Asian markets will move north like there is no tomorrow. Until it happens, the odds of sellers returning to the terminals soon are very high.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
