Asian Markets Mixed as China Data Boosts Hopes

AFP/APP

Hong Kong: Asian markets traded mixed on Monday as investors weighed fresh US inflation data against signs of recovery in China’s manufacturing sector, which lifted hopes that the world’s second-largest economy may be regaining momentum.

China’s Shanghai Composite gained around one percent after official data showed factory activity expanded in March for the first time in six months. The manufacturing purchasing managers’ index (PMI) rose to 50.8, beating market expectations and marking the first growth since September.

Analysts said stronger exports and potential increases in government spending could further support China’s economic recovery. Zhang Zhiwei of Pinpoint Asset Management said the industrial sector appeared resilient, with improved momentum possible if fiscal support increases.

Meanwhile, investors closely monitored US inflation figures after the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, showed a modest annual increase in March. The core reading, which excludes volatile food and energy prices, eased slightly.

Federal Reserve Chair Jerome Powell said the data was largely in line with expectations and indicated that policymakers remained confident about bringing inflation down toward the central bank’s two percent target.

The inflation report had limited impact on market expectations for a possible June interest rate cut, although Powell cautioned that borrowing costs were unlikely to return to the ultra-low levels seen after the 2008 financial crisis.

Market sentiment also reflected recent strength in US equities, with the Dow Jones Industrial Average and S&P 500 closing at record highs last week. The S&P 500 posted its strongest first quarter performance since 2019.

In regional trading, Seoul, Singapore and Manila recorded gains, while Taipei and Jakarta declined. Tokyo’s Nikkei 225 fell more than one percent after the Bank of Japan’s Tankan survey showed business confidence among major manufacturers weakened in the first quarter.

The Japanese yen edged higher after stabilising following its recent decline to a 34-year low against the US dollar.

Oil prices moved slightly higher, with West Texas Intermediate crude rising 0.3 percent to $83.45 a barrel, while Brent crude also gained 0.3 percent to $87.23 a barrel.