Asian stocks dip ahead of Chinese data

Most Asian stock markets fell on Monday as investors braced for a spate of Chinese economic data, as well as monetary policy indications from a crop of Federal Reserve speakers later in the week.

China’s Shanghai Composite index was the worst performer on the day, down 1.1% as local industrial, maritime, and media firms suffered heavy losses on dwindling optimism about the country’s economic recovery.

The prestigious Shanghai Shenzhen CSI 300 index dipped 0.4%, as investors await Chinese industrial output, retail sales, and fixed asset investment data on Tuesday. While the report is likely to show some improvement in April over the previous month, it also comes after a spate of Chinese economic readings that fell short of forecasts.

Chinese imports, inflation, and industrial activity all fell in April, indicating that the post-COVID upswing had peaked.

Given China’s significance as a major commercial hub for the region, the country’s weakness impacted sentiment towards larger Asian markets. The Hang Seng index in Hong Kong was unchanged on Monday, while the KOSPI in South Korea and the Taiwan Weighted index both fell 0.3%.

The ASX 200 in Australia fell 0.1% after data indicating a sustained decrease in construction approvals indicated continued deterioration in the country’s housing sector, weighing on heavyweight bank companies.

Shares of Newcrest Mining Ltd, the country’s largest gold miner, increased 1.2% after its board endorsed a $17.8 billion buyout bid from Newmont Corp. of the United States.

Regional markets took a weak lead-in from Wall Street following softer-than-expected consumer sentiment data on Friday, which pointed to slowing growth as the world’s largest economy grapples with high interest rates and sticky inflation.

Focus this week is now on U.S. industrial production and retail sales data for more cues on the world’s largest economy. Markets are also awaiting a barrage of Fed speakers this week, most notably Fed Chair Jerome Powell on Friday, for more insight into monetary policy, amid growing expectations that the Fed will keep rates higher for longer.

Japan’s Nikkei 225 index was the sole outlier for the day, rising 0.7% as softer-than-expected producer inflation data pointed to less pressure on the Bank of Japan to tighten policy this year. Sentiment towards Japan was also aided by a stellar first-quarter earnings season.