Asian markets: China Shanghai Composite volatile while WTI crude prices slumped and the US dollar strengthens
Asian stock market indices were trading in a mixed pattern on 10 May, 2016Reuters

While Asian stock market indices were trading in a mixed pattern on 10 May, China's Shanghai Composite Index was up 0.15% at 2,836.41 as of 5.45am. This followed a negative close on Wall Street and Footsie overnight, while WTI crude prices pulled back and the US dollar strengthened against its peers.

Angus Nicholson, market analyst at IG, opined that this trend in the US dollar and oil prices would dominate markets in the near-term. Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, explained: "Short covering is the primary reason for the strong gains in dollar/yen. Don't underestimate the power of short covering. When a currency... squeezes higher quickly, causing investors to panic and abandon their positions, the rally could be sharp and aggressive particularly when positions are skewed so heavily in the opposite direction."

FX strategists at BNP Paribas added: "The market appears to be increasingly uncomfortable maintaining current levels of short-dollar exposure, with continued comments from Fed officials suggesting markets are under-pricing rate hike chances."

Meanwhile, indices in the rest of Asia traded as follows on 10 May at 5.54am GMT:

CountryIndexPriceUp/Down%Change
Hong KongHang Seng Index20,114.76Down0.21%
JapanNikkei 22516,553.31Up2.08%
South KoreaKOSPI1,978.28Up0.53%
IndiaCNX Nifty7,845.80Down0.28%
AustraliaS&P/ASX 2005,338.00Up0.33%

Meanwhile, overnight (9 May), the Dow Jones Industrial Average closed at 17,705.91, down 0.20%, while the FTSE 100 closed at 6,114.81, down 0.18%.

Among commodities, oil prices were mixed. Investors were focused on two aspects. While one of them was the appointment of Khalid al-Falih as the new energy minister of Saudi Arabia, the other was Reuters forecasting US crude inventory to rise. On 10 May, WTI crude oil was trading 0.09% lower at $43.40 (£30.13, €38.13) a barrel, while Brent was trading 0.41% higher at $43.81 a barrel at 6.06am GMT.