Asian stock indexes saw a mixed day on Tuesday as investors digested contrasting data on China’s recovery while the threat of more central bank tightening continued to cast a shadow.
Traders brushed off an initial lift from better-than-expected Chinese economic figures as signs of patchiness in the country’s bounceback later weighed on sentiment.
That mood saw stocks retreat in some corners while gains were capped in others. Staying positive was Japan’s Nikkei share average, which climbed for an eighth straight session, boosted by gains in banks on positive US data and as a weaker yen lifted exporters.
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The Nikkei rose 0.51% to close at 28,658.83, nearing the highest level so far this year and marking its longest winning streak since March 2022. The broader Topix climbed 0.69% to 2,040.89.
US shares rose on Monday after several banks kicked off first-quarter reports with strong results and a positive reading from the New York Fed’s barometer of manufacturing activity.
Comments by billionaire investor Warren Buffett last week that he was adding to investments in Japan, along with regulatory pressure on companies with low price-to-book (PBR) ratios, also lifted interest in equities.
But the Nikkei is trading more than 3% over its 25-day moving average, which may be a sign of volatility ahead, Nomura Securities strategist Kazuo Kamitani said.
“It’s too early to say the market is overheating, but it could be a warning sign for high values,” he said.
China shares were mixed and traded in a narrow range, even as the country reported higher-than-expected quarterly growth on a boost from consumption.
The momentum was offset by some disappointing sub-data, including property investment and industrial output, which pointed to an uneven recovery trend, analysts said.
China’s economy grew 4.5% year-on-year in the first three months of the year, data from the National Bureau of Statistics showed on Tuesday, faster than the 2.9% reported in the previous quarter and beating analysts’ forecasts of a 4% expansion.
Industrial output rose 3.9% in March year-on-year, accelerating from a 2.4% increase in the first two months but missing expectations slightly.
“The better-than-expected economic data shatters worries for a weak recovery, but it’s not showing a strong recovery either,” said Tao Chuan, chief macro analyst at Soochow Securities in Beijing.
Sydney, Seoul, Mumbai Slide
Meanwhile, property investment fell 5.8% from a year earlier in the first three months of 2023, from a 5.7% decline in January-February.
The Shanghai Composite Index rose 0.23%, or 7.72 points, to 3,393.33, while the Shenzhen Composite Index on China’s second exchange fell 0.12%, or 2.61 points, to 2,138.79.
The Hang Seng Index dropped 0.63%, or 131.94 points, to 20,650.51, dragged lower by consumer and technology stocks.
Elsewhere across the region, Jakarta rose but Sydney, Seoul, Singapore, Wellington, Mumbai, Taipei, Bangkok and Manila were all negative.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5%, a deeper loss than earlier in the day when it was off 0.27%.
In Asian trade, the yield on the benchmark 10-year Treasury notes rose to 3.5889% compared with its US close of 3.591% on Monday.
The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 4.1773% compared with a US close of 4.188%.
Dollar Presssure on Yen
Australia’s central bank considered hiking rates for an 11th time in April before deciding to pause, but was ready to tighten further if inflation and demand failed to cool, minutes of the Reserve Bank of Australia’s April meeting showed.
In early European trades, the pan-region Euro Stoxx 50 futures were up 0.16% at 4,322, German DAX futures were up 0.13% at 15,951, FTSE futures were up 0.16% at 7,893.
US stock futures, the S&P 500 e-minis, were down 0.08% at 4,173.3.
The dollar rose 0.02% against the yen at 134.49, still some distance from its high this year of 137.91 hit in March.
The European single currency was up 0.1% to $1.0929, having gained 0.89% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down at 102.03.
US crude ticked up 0.27% to $81.05 a barrel. Brent crude rose to $85 per barrel. Gold was slightly high with the spot price at $1999.45 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.51% at 28,658.83 (close)
Hong Kong – Hang Seng Index < DOWN 0.63% at 20,650.51 (close)
Shanghai – Composite > UP 0.23% at 3,393.33 (close)
London – FTSE 100 > UP 0.21% at 7,896.16 (0935 GMT)
New York – Dow > UP 0.30% at 33,987.18 (Monday close)
- Reuters with additional editing by Sean O’Meara
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China Sees 4.5% Growth in First Quarter, But Outlook Cloudy
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