Asian Shares Mixed Ahead Of Powell Remarks

Asian shares ended mixed on Wednesday as Chinese industrial profits data disappointed and a softer than expected headline inflation figure in Australia raised the prospect of a pause in interest rate rises from the Reserve Bank of Australia.

Investors shifted their focus to Fed Chair Jerome Powell’s upcoming remarks after a slew of upbeat U.S. economic data pointed to a resilient economy.

The dollar moved lower in Asian trading and gold lingered near three-month lows, while oil prices edged up slightly after the release of a mixed industry report on U.S. crude stockpiles.

China’s Shanghai Composite Index cut early losses to end marginally lower at 3,189.38 as weak industrial profits data for May underscored the uneven nature of the economic recovery and fueled the debate over the need for additional stimulus.

Chinese industrial profits declined 18.8 percent year-on-year in the January to May period amid weak demand and falling producer prices, the National Bureau of Statistics said earlier today.

Hong Kong’s Hang Seng Index fluctuated before ending up 0.1 percent at 19,172.05.

Hua Hong Semiconductor dropped 1.4 percent after reports that the U.S. is considering new restrictions on exports of artificial intelligence chips to China.

Gains in technology stocks lifted Japanese markets, with the Nikkei 225 Index rallying 2.0 percent to 33,193.99 after four days of losses. The broader Topix jumped 2.0 percent to 2,298.60.

Advantest, Tokyo Electron and Screen Holdings climbed 3-4 percent, while Uniqlo clothing chain operator Fast Retailing advanced 1.6 percent.

Automakers Honda and Toyota surged 2-3 percent after the yen hit its lowest level since November. Higher bond yields lifted financials, with Nomura Holdings gaining 3.7 percent.

Shipping stocks underperformed after rallying in the two previous sessions. Kawasaki Kisen Kaisha plummeted 6.2 percent.

Seoul stocks fell notably on the back of weak Chinese data and amid caution ahead of Powell’s remarks at a forum in Portugal later in the day. The Kospi slid 0.7 percent to 2,564.19.

South Korean consumer sentiment improved to the highest level in thirteen months in June, as households’ current and future living conditions improved amid an ease in inflation, survey results from the Bank of Korea showed today.

Australian stocks rose sharply after the weighted inflation rate for May came in at 5.6 percent, sharply lower than April’s figure of 6.8 percent. Headline inflation came in at 5.8 percent for the month, the lowest recorded rate since April 2022.

The benchmark S&P/ASX 200 Index jumped 1.1 percent to 7,196.50, marking its largest single-day gain since April 11. The broader All Ordinaries Index closed 1.2 percent higher at 7,384.10.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.7 percent to 11,733.46.

U.S. stocks advanced overnight on economic optimism on the back of positive economic data.

New orders for key manufactured capital goods unexpectedly rose in May, sales of new single-family homes surged in the month and a measure of U.S. consumer confidence surged to a near 1-1/2 year high in June, helping ease concerns about an impending recession.

The Dow gained 0.6 percent to snap a six-session losing streak, while the S&P 500 climbed 1.2 percent and the tech-heavy Nasdaq Composite rallied 1.7 percent.

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