Most Asian stocks remained relatively stable on Tuesday, as investors refrained from making significant moves ahead of crucial inflation reports expected this week. The U.S. market holiday further contributed to a lack of clear trading signals.
Mixed Performance Across Regional Markets
Regional markets showed mixed results on Monday following China’s announcement of additional stimulus measures targeting the local chipmaking industry. Chinese technology stocks continued to climb on Tuesday, buoyed by optimism surrounding further stimulus.
However, the broader markets remained subdued, influenced by the lack of cues from the U.S. due to the Memorial Day holiday.
Hong Kong Outperforms, Mainland China Stagnates
Hong Kong’s Hang Seng Index stood out in Asia, gaining 0.9% after strong performance in the previous session. Conversely, China’s benchmark Shanghai Shenzhen CSI 300 and Shanghai Composite indexes remained mostly flat.
Chinese tech stocks received a boost from the government’s announcement of a new $47 billion fund aimed at supporting the local chipmaking industry, a move seen as crucial amid ongoing U.S. sanctions and tariffs.
Positive earnings reports also lifted sentiment. Alibaba Health Information Technology Ltd, a subsidiary of the e-commerce giant, surged over 12% after reporting a substantial profit increase for the year ending March 31, making it the biggest contributor to the Hang Seng’s gains.
Despite this, broader investor sentiment towards Chinese markets cooled as they awaited details on the implementation and financing of the recent stimulus measures. Anticipation of key Chinese purchasing managers index data later this week added to the cautious outlook.
Broader Asian Markets Await Inflation Data
Across the region, Asian markets traded in a narrow range ahead of key inflation data from both the region and the U.S. expected later in the week.
Australia’s ASX 200 fell 0.2%, influenced by lower-than-expected retail sales growth in April, pressured by inflation and high interest rates. An important consumer price index inflation reading is due on Wednesday.
Japan’s Nikkei 225 dropped 0.4%, while the broader TOPIX declined 0.1%. Upcoming inflation data from Tokyo is anticipated to impact the Bank of Japan’s interest rate outlook.
South Korea’s KOSPI remained flat, and futures for India’s Nifty 50 index suggested a steady opening following the index’s brief rise to record highs in the previous session.
Global Inflation Data in Focus
Beyond Asia, significant consumer price index readings from the eurozone are also expected this week. However, the primary focus is on the U.S. PCE price index data, the Federal Reserve’s preferred inflation gauge, which is likely to influence global market trends.
