Asian equities decline before Chinese data and Fed hints. In anticipation of a series of Chinese economic data. Investors pulled down from many Asian stock markets on Monday.
Asian stock markets worry upcoming slew of important reports
On Monday, most Asian stock markets declined as investors withdrew ahead of a series of Chinese economic indicators. Also in the week, a number of Fed speakers were expected to provide monetary policy cues.
The biggest loser for the period was China’s Shanghai Composite Index, which was down one percent. Local industrial, shipping, and media sectors suffered sharp declines on dwindling hopes for a nationwide economic revival.
Chinese, S. Korean, and Australian index under pressure. Nikkei up.
Blue-chip Shanghai Shenzhen CSI 300 index is lower by 0.4%. As traders awaited Tuesday’s reports on China’s industrial production, retail sales, and fixed asset investment. The report comes after a number of Chinese economic gauges fell short of forecasts during the month. Even though it is anticipated that April’s results would show an uptick from the previous month.
Given that China serves as a significant commercial center for the region. Its weakness affected the perception of other Asian markets. On Monday, the Taiwan Weighted Index and the KOSPI in South Korea both fell by 0.3%. Whereas the Hang Seng index in Hong Kong was unchanged.
The ASX 200 in Australia fell 0.1% as data indicated a continuous fall in construction approvals. Suggested that the nation’s housing market remained poor, and in turn put pressure on major bank companies.
The largest gold miner in Australia, Newcrest Mining Ltd (ASX: NCM), saw a 1.2% increase in share price. After its board approved a $17.8 billion buyout bid from American miner Newmont Corp (NYSE: NEM).
Japan’s Nikkei 225 index was the day’s single outlier, climbing 0.7% as softer-than-anticipated producer inflation figures. Suggested that the Bank of Japan will not be under as much pressure to tighten policy in the coming months. A strong first-quarter earnings season also helped boost confidence in Japan.
Before economic data and Fed speakers, Asia FX drops and the dollar holds steady.
As markets expected further signs on the world’s largest economies as well as fiscal stimulus signals from multiple Fed speakers. The majority of Asian currencies dipped on Monday as the dollar stabilized following sharp advances.
In relation to the dollar, the Chinese yuan dropped 0.1% and touched a two-month low. In addition, the yuan traded just below the 7 mark against the US dollar as worries about China’s economic recovery grew.
The PPI inflation data for April came in less than anticipated, which reduced pressure on the BoJ to swiftly tighten policy, causing the Japanese yen to decline by 0.3%.
Other outliers were the Australian dollar, which increased 0.3% after hitting a one-week low last week. And the South Korean won, which increased by 0.2 percent.
Further, As the U.S. greenback maintained a large portion of its gains of late. Asian currencies stayed under stress. The dollar had its strongest week as of September due to expectations that the Fed would not lower interest rates during the year.
