Asian Stocks Rise After Weekly Losses; More Rate Indications Awaited

Asian stocks rise

Asian stocks rise advanced on Monday, rebounding from last week’s losses. However, investors remain cautious as they await key cues on U.S. inflation and interest rates later this week.

Positive Cues from Wall Street

Regional markets took some encouragement from a strong close on Wall Street on Friday. Gains in technology stocks helped the NASDAQ Composite achieve a record-high close, providing a positive backdrop for Asian markets.

U.S. Stock Index Futures

In Asian trading, U.S. stock index futures fell slightly. Trading volumes are expected to remain low due to the Memorial Day holiday in the United States.

China Edges Higher with Industrial Profit Growth

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose about 0.1%, showing a mild recovery from last week’s losses.

  • Industrial Profits: Data released on Monday indicated that Chinese industrial profits grew at a steady pace in April, signaling ongoing improvement in one of the country’s key industries.
  • Stimulus Measures: Despite recent supportive measures from Beijing, gains in Chinese markets were limited. Analysts remain cautious about the execution and funding of these stimulus efforts.

Hong Kong’s Hang Seng index, however, fell 0.4%, driven by losses in mainland stocks.

Asian Stocks Rise

Overall, gains in Asian markets were modest as investors remained on edge ahead of important U.S. inflation data expected later this week.

  • PCE Price Index: The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, is due on Friday. This data is likely to influence the outlook for U.S. interest rates.
  • Interest Rate Expectations: Last week, dwindling expectations for U.S. interest rate cuts weighed on Asian stocks, as traders largely dismissed the possibility of a rate cut in September.

Regional Market Highlights

  • Japan: The Nikkei 225 rose 0.3%, as did the broader TOPIX index. Investors are looking ahead to key economic data from Japan, including inflation, retail sales, and industrial production figures, due later this week.
  • South Korea: The KOSPI added 0.7%, supported by gains in technology stocks. Excitement over artificial intelligence, particularly following strong results from NVIDIA Corporation, boosted shares of memory chip maker SK Hynix Inc by 4% to a record high.
  • Trilateral Trade Talks: China, Japan, and South Korea are also expected to begin trilateral trade discussions.
  • Australia: The ASX 200 rose 0.7%, rebounding from last week’s losses.
  • India: Futures for India’s Nifty 50 index pointed to a mildly positive open, with the index remaining close to recent record highs.

In summary, while Asian markets saw some recovery on Monday, gains were tempered by anticipation of upcoming U.S. economic data and its potential impact on global financial markets.asian 

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