Most Asian stocks moved little on Monday as a sustained conflict between Iran and Israel kept risk appetite on the backfoot, as did anticipation of a barrage of central bank meetings this week.
Mixed economic readings from China kept local stocks trading sideways.
Regional markets took middling cues from a largely negative session on Wall Street, as the conflict in the Middle East battered risk assets. But S&P 500 Futures rose marginally in Asian trade, indicating that Wall Street may be attempting a recovery after Friday’s losses.
Focus this week is squarely on a barrage of central bank meetings, starting with the Bank of Japan on Tuesday. The Federal Reserve is set to decide on rates on Wednesday, while the Bank of England, Swiss National Bank, and the People’s Bank of China will also decide on rates later this week.
Chinese stocks flat after mixed industrial prod, retail sales data China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved less than 0.1% each, while Hong Kong’s Hang Seng index lost 0.2%.
Government data released on Monday showed Chinese industrial production grew slightly less than expected in May, amid increased pressure from U.S. trade tariffs.
But Chinese retail sales growth blew past expectations, signaling some resilience in consumer spending despite increased economic uncertainty.
The mixed economic prints sparked even more uncertainty over the Chinese economy, as it grapples with a U.S. trade war and a sustained deflationary trend.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Washington and Beijing had last week announced some progress in their trade negotiations, although no permanent deal was announced. Reuters reported that the recent deal also left the issue of China’s rare earth export controls unresolved, amid mounting concerns over supply shortages.
The PBOC is set to decide on its benchmark loan prime rate later this week, after cutting the rate earlier this year.
Japan’s Nikkei 22 upbeat before BOJ rate decision Japanese stocks outpaced their peers on Monday, with the Nikkei 225 adding 1%, while the TOPIX rose 0.6%.
Focus was largely on the BOJ, which is set to leave interest rates unchanged on Tuesday.
But traders are growing increasingly confident that the central bank will raise interest rates by July, especially amid increasing Japanese inflation and signs of resilience in the economy.
Inflation is expected to be further underpinned by recent wage hikes in the country, giving the BOJ more impetus to hike rates. Governor Kazuo Ueda said as much in a parliamentary address last week, stating that the BOJ will hike rates further as inflation rises.
Broader Asian markets were a mixed bag as investors grappled with heightened tensions in the Middle East and persistent uncertainty over U.S. trade policy.
South Korea’s KOSPI continued to outperform after investors welcomed the liberal party winning the presidential election earlier this month. The KOSPI rose 0.7% was close to a 3-½ year high.
