Trade of Asia

Asian stocks rise, but China’s market declines due to underwhelming data

On Friday, several Asian stocks showed slight gains, recovering from recent losses. However, China’s markets lagged behind their peers due to softer-than-expected economic readings, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes falling 0.5% and 0.7%, respectively. The dip was due to a private survey that showed growth in China’s service sector unexpectedly slowed in April. Although the growth rate remained close to a three-year peak, concerns were raised about the post-COVID economic rebound as the manufacturing sector suffered a surprise contraction. Despite the Chinese government’s attempts to support private investment, investors remained doubtful about the breadth of an economic recovery this year.

Meanwhile, broader Asian markets slowly recovered from steep losses earlier in the week, with technology-heavy indexes showing the most gains. However, most regional bourses were still headed for weekly losses. Asian bank stocks were under pressure due to fears of contagion from a brewing U.S. crisis. After the collapse of First Republic earlier this week, markets feared that its peers PacWest Bancorp and Western Alliance could be the next dominoes to fall. The U.S. Federal Reserve’s tapering of its hawkish stance did little to boost Asian markets, as the central bank also warned of cooling economic growth this year. Furthermore, markets are also awaiting nonfarm payrolls data for more cues on monetary policy.

The Australian ASX 200 index showed a rise of 0.3% on stronger-than-expected results from ANZ Group Holdings Ltd. However, ANZ warned of a credit slowdown in the coming months due to Australian consumers grappling with high interest rates and inflation. In India, the Nifty 50 index fell 0.5% in early trade on losses in heavyweight bank stocks, as markets feared potential exposure to the recent Go First airline bankruptcy. Trading volumes were subdued due to market holidays in Japan and South Korea.

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