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Asia stocks mixed ahead of U.S. inflation data, Fed meeting


The Nikkei 225 index was 0.3% higher at 39,155.16, Hang Seng dipped 1.6% to 18,079.93, the Shanghai Composite shed 0.9% to 3,022.96, S&P/ASX 200 slid 1.6% to 7,735.50, and Kospi was up 0.4% to 2,710.61

Asian stocks were mixed on Tuesday in a busy week with several reports on U.S. inflation due along with a policy meeting of the Fed.

U.S. futures and oil prices dropped.

In Tokyo, the Nikkei 225 index was 0.3% higher at 39,155.16 as an upward revision of Japan’s economic data on Monday was well received, while continued weakness of the yen boosted exports. Investors are watching for the outcome of a meeting by the BoJ. The central bank hiked its benchmark interest rate in March from 0 to 0.1% for the first time in 17 years.

Analysts said markets were leaning toward two rate hikes by the end of 2024, with broad expectations of further rate hikes as soon as July.

Hong Kong’s Hang Seng dipped 1.6% to 18,079.93, and the Shanghai Composite shed 0.9% to 3,022.96 after reopening from a public holiday. Markets remained cautious ahead of a report on inflation in China due out Wednesday.

Australia’s S&P/ASX 200 slid 1.6% to 7,735.50. South Korea’s Kospi was up 0.4% to 2,710.61.

On Monday, the S&P 500 added 0.3% to 5,360.79, topping its all-time high set last week. The Nasdaq composite also set a record after advancing 0.3% to 17,192.53, while the DJIA added 0.2% to 38,868.04.

Data on the economy have come in mixed recently, and traders are hoping for a slowdown that stops short of a recession and is just right in magnitude. A cooldown would put less upward pressure on inflation, which could encourage the Fed to trim its main interest rate from its highest level in over two decades.

Bottom line, the data remains mixed, leaving all of the major macro outcomes still on the table for this year, as per Morgan Stanley strategists led by Michael Wilson.

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