Asian Shares End Lower As Investors Await Inflation Data

Asian stocks fluctuated before closing lower on Tuesday, as investors remained focused on upcoming U.S. and European inflation data for additional clues on the path of interest rates.

The dollar extended weakness to hit a one-week low as market participants awaited the U.S. PCE price index report due later this week as well as speeches from Fed officials for more clarity on the outlook for monetary policy.

Traders also looked ahead to the release of German and Eurozone inflation figures this week that could cement expectations for an ECB rate cut next week.

Oil and gold prices fell slightly in Asian trading despite increased tensions in the Middle East following the death of an Egyptian soldier during a clash with Israeli troops.

Chinese markets ended lower after rising in initial trading as the financial hub of Shanghai lowered down-payment ratios and the minimum mortgage threshold as part of measures to boost the property market.

China’s Shanghai Composite Index ended down 0.5 percent at 3,109.57, while Hong Kong’s Hang Seng Index finished marginally lower at 18,821.16.

Japanese markets ended modestly lower after data showed Japanese service prices rose at the fastest clip in over 30 years, boosting the case for gradual increase in interest rates.

However, the central bank’s key measurements of underlying inflation in April all fell below its 2 percent target for the first time since August 2022, stoking fresh uncertainty over the timing of rate hikes.

The Nikkei 225 Index slipped 0.1 percent to 38,855.37, while the broader Topix Index settled marginally higher at 2,768.50.

Seoul stocks ended little changed, with the Kospi finishing marginally lower at 2,722.85 after a choppy session. LG Energy Solution dropped 1.2 percent, LG Chem shed 1.4 percent and Samsung SDI lost 2.5 percent, while Samyang Foods rallied 3.7 percent.

Australian stocks closed modestly lower as April retail sales data missed expectations and investors awaited Wednesday’s inflation data for clues on monetary policy.

The benchmark S&P ASX 200 Index dipped 0.3 percent to 7,766.70, dragged down by miners and financials. The broader All Ordinaries Index ended down 0.3 percent at 8,034.90.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index fell 0.6 percent to 11,682.51, marking its third consecutive session of losses.

The U.S. markets were closed overnight for Memorial Day.

European stocks closed higher Monday on late hour buying after two key ECB policymakers threw their weight behind the prospect of an interest rate cut next week.

The pan European STOXX 600 rose 0.3 percent. The German DAX added 0.4 percent and France’s CAC 40 gained half a percent, while the U.K. market was closed for a Bank holiday.

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