Asian stocks made modest gains on Tuesday, with investors exercising caution ahead of crucial economic data releases from the United States and China scheduled later in the week. While most regional bourses have seen robust performances throughout November, market participants remained on the sidelines in anticipation of key indicators.
Australia’s ASX 200 emerged as one of the top performers for the day, registering a 0.6% increase, buoyed by strength in real estate and mining stocks. Lynas Rare Earths Ltd (ASX:LYC) saw a notable rise of over 1% after China announced restrictions on rare earth exports, contributing to a global supply limitation.
Meanwhile, an unexpected decline in Australian retail sales heightened optimism regarding easing inflation. This development prompted speculation of a potentially less hawkish stance from the Reserve Bank. Governor Michele Bullock emphasized that Australian inflation was closely aligned with global trends, urging caution in rate hikes to alleviate price pressures.
South Korea’s KOSPI rose by 0.7%, despite data indicating a further deterioration in consumer confidence for November. However, sentiment remained above 2023 lows, reflecting recent improvements in the South Korean economy.
India’s Nifty 50 index futures pointed towards a positive open after a extended weekend, while Philippine shares led gains across Southeast Asia with a 0.5% increase.
In Japan, the Nikkei 225 index experienced a 0.2% dip, pausing after reaching 33-year highs, in anticipation of forthcoming economic cues. Investors await Japanese industrial production and retail sales data later in the week.
The regional markets took a subdued lead from Wall Street, where U.S. indexes closed slightly lower on Monday in anticipation of significant economic indicators scheduled for later in the week. Investors are closely monitoring the PCE prices, the Federal Reserve’s preferred inflation gauge, along with purchasing managers index readings for November and a revised reading on third-quarter GDP.
Attention is focused on any indications of a cooling U.S. economic growth trajectory, with growing expectations that the Federal Reserve has concluded its interest rate hikes. This sentiment has positioned most Asian bourses for a robust performance in November, although Chinese shares have lagged behind their regional counterparts.
Chinese markets exhibited a lackluster performance on Tuesday, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes remaining flat. Hong Kong’s Hang Seng experienced a 0.3% decline, driven by weaker property stocks amid growing impatience for additional government support.
As investors eagerly await PMI data for November, scheduled for release on Thursday, concerns over a Chinese economic slowdown persist. Monday’s data revealed a persistent, albeit slowing, decline in Chinese industrial profits.
Apprehensions regarding a potential Chinese economic slowdown and impatience for increased stimulus from Beijing have caused Chinese stock indexes to trail their Asian peers throughout November. The CSI 300 has recorded a 1.6% decline for the month, marking its fourth consecutive month in the red, while the SSEC saw marginal gains.
In contrast, the Nikkei and the KOSPI have surged between 8% and 11% this month. The ASX 200 and the Nifty both added nearly 4% in November, underscoring the diverse performances across the Asian markets.
