Asian Shares Mixed In Cautious Trade

Asian stocks ended mixed on Monday, with a stronger-than-expected U.S. inflation reading and mixed data from China and Japan keeping underlying sentiment cautious.

Chinese shares rose and the yuan pulled back from a three-year high against the dollar after warnings from Chinese officials against speculative bets on the currency.

The benchmark Shanghai Composite index edged up 14.69 points, or 0.41 percent, to 3,615.48 while Hong Kong’s Hang Seng index ended marginally higher at 29,151.80.

The manufacturing sector in China continued to expand in May, albeit at a slower pace, the latest survey from the National Bureau of Statistics showed with a manufacturing PMI score of 51.0. That was shy of expectations for 51.1.

The non-manufacturing PMI came in with a score of 55.2, beating forecasts for 54.9, which would have been unchanged from the previous month’s reading.

Japanese shares fell sharply as the government enhanced its response to tackle the fourth wave of coronavirus infections with the state of emergency extended for three weeks until June 20 for more than 40 percent of Japan’s population.

Investors also digested downbeat industrial output and retail sales figures.

Industrial output in Japan was up 2.5 percent month-on-month in April, the Ministry of Economy, Trade and Industry said. That missed expectations for an increase of 4.1 percent following the downwardly revised 1.7 percent gain in March (originally 2.2 percent).

The total value of retail sales was down a seasonally adjusted 4.5 percent sequentially in April – missing expectations for a gain of 2.0 percent following the 1.2 percent increase in March.

The Nikkei average ended down 289.33 points, or 0.99 percent, at 28,860.08, after having jumped more than 2 percent on Friday to finish at the 29,000-level for the first time since May 10. The broader Topix index closed 1.26 percent lower at 1,922.98.

Index heavyweights Fast Retailing and SoftBank Group gave up 0.7 percent and 1.6 percent, respectively. Chipmaker Renesas Electronics lost 5.5 percent after announcing a new share issue.

Australian markets gave up early gains to end slightly lower, as inflation worries persisted and Victoria went into a strict seven-day lockdown. Investors also awaited the RBA’s monthly policy announcement on Tuesday and the GDP data due Wednesday for directional cues.

The benchmark S&P/ASX 200 index dropped 17.90 points, or 0.25 percent, to 7,161.60 after climbing more than 1 percent to a record high in the previous session. The broader All Ordinaries index ended down 17.30 points, or 0.23 percent, at 7,406.70.

Strong commodity prices helped lift miners, with Rio Tinto and Fortescue Metals Group rising 0.6 percent and 1.4 percent, respectively.

Gold miners Evolution and Northern Star Resources rallied more than 2 percent as bullion prices held steady above the $1,900-level in international market on inflation fears.

Woodside Petroleum, Santos, Oil Search and Origin Energy dropped 1-3 percent despite oil prices climbing in early Asian deals.

Software firm Nuix plummeted 17.8 percent after lowering its full-year revenue forecast. Link Administration Holdings slumped 6.8 percent after rejecting KKR & Co’s takeover bid for PEXA.

In economic news, private sector credit in Australia was up 0.2 percent sequentially in April, central bank data showed – slowing from the 1.0 percent gain in March. On a yearly basis, credit gained 1.3 percent, accelerating from 0.4 percent in the previous month.

Seoul stocks rose for the second day running as tapering fears ebbed. The benchmark Kospi edged up 15.19 points, or 0.48 percent, to close at 3,203.92.

Pharmaceutical giant Samsung Biologics jumped 2.2 percent, chipmaker SK Hynix climbed 1.6 percent and internet portal operator Naver added 1.3 percent.

In economic news, industrial output in South Korea slipped a seasonally adjusted 1.6 percent sequentially in April, Statistics Korea said. That missed expectations for an increase of 1.5 percent.

Another report showed the value of retail sales in South Korea was up a seasonally adjusted 2.3 percent sequentially in April. That was in line with expectations and was unchanged from the March reading.

New Zealand shares rose sharply in a broad-based rally as bond yields and swap rates moved lower in the domestic market. The benchmark NZX 50 index climbed 138.47 points, or 1.14 percent, to 12,320.72.

Pacific Edge shares advanced 2.6 percent after the cancer diagnostics firm posted a 101 percent increase in revenue for the 12 months ending March 31.

U.S. stocks eked out modest gains on Friday as President Joe Biden’s budget revealed a blueprint for addressing long-standing inequities in the U.S. economy and an inflation reading preferred by the Federal Reserve showed an acceleration in the pace of price growth but not as much as traders had feared.

The Dow edged up 0.2 percent, while the S&P 500 and the tech-heavy Nasdaq Composite both inched up around 0.1 percent.

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