Asia report: Markets fall as investors digest wave of China data

(Sharecast News) - Asia-Pacific markets were primarily in the red on Monday, as investors digested key economic data from China. The People's Bank of China maintained its medium-term lending facility rate at 2.5% on CNY 182bn, aligning with expectations.

China also reported a 3.7% increase in retail sales for May, surpassing the anticipated 3% growth from a Reuters poll.

However, industrial output grew by 5.6% year-on-year, missing the expected 6% rise, while fixed asset investment increased by 4%, slightly below the 4.2% forecast.

"China's monthly activity data for May on Monday are likely to reveal an uneven economic recovery," said TickMill market analyst Patrick Munnelly earlier.

"Industrial output is forecast to slow to 6.4% from 6.7% in April, retail sales to pick up to 3% from 2.3%, and urban investment is seen steady.

"Unemployment and house prices will also be watched."

Munnelly added that the PBoC was expected to hold its one-year medium-term lending facility rate at 2.5% on Monday, continuing to prioritise currency stability despite growing calls for older stimulus measures to combat deflationary pressures and spur domestic demand.

"China is also likely to leave its one-year and five-year loan prime rates unchanged at 3.45% and 3.95% respectively on Thursday."

Markets in the red across the Asia-Pacific region

In Japan, the Nikkei 225 fell by 1.83% to 38,102.44, while the Topix index declined by 1.7% to 2,700.01.

Significant drops on Tokyo's benchmark included Trend Micro, which plunged by 6.08%, Ricoh by 5.96%, and Tokyo Tatemono by 5.49%.

On the mainland, the Shanghai Composite dipped by 0.55% to 3,015.89, whereas the Shenzhen Component rose by 0.31% to 9,281.25.

Major losers in Shanghai included Guangdong Tianan New Material, down by 5.81%, Beijing Urban Construction Investment & Development by 5.36%, and Anhui Xinhua Media by 5.26%.

The Hang Seng Index in Hong Kong edged down by 0.03% to 17,936.12.

Notable declines were seen in ENN Energy, which fell by 3.11%, China Resources Beer by 3.28%, and Longfor Properties by 3.24%.

South Korea's Kospi decreased 0.52% to 2,744.10, with leading decliners including Doosan Robotics, dropping by 3.88%, SKC by 3.69%, and LG Energy Solution by 3.58%.

The S&P/ASX 200 in Australia slipped by 0.31% to 7,700.30.

Contact Energy experienced a significant drop of 7.01%, Arcadium Lithium fell by 6.07%, and Paladin Energy by 4.88%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 fell by 1.4% to 11,698.51, as Synlait Milk dropped by 6.25%, Pacific Edge by 5.05%, and Stride Property by 3.91%.

On the currency front, the dollar was last up 0.17% on the yen, trading at JPY 157.66.

The greenback meanwhile rose 0.16% against the Aussie to AUD 1.5140, while it jumped 0.42% against the Kiwi, changing hands at NZD 1.6349.

In oil markets, Brent crude futures were last up 0.31% on ICE at $82.88 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.34% to $78.72.

China data, monetary policy in focus

In economic news, China - the world's second-largest economy - released key economic data for May, presenting a mixed picture of its recovery.

Retail sales outperformed expectations, growing by 3.7% year-on-year, surpassing the 3% rise anticipated by a Reuters poll of economists.

That suggested resilient consumer spending despite broader economic challenges.

However, other critical economic indicators fell short of forecasts, as industrial output increased by 5.6% compared to the same period last year, below the predicted 6% growth.

Similarly, fixed asset investment rose by 4% year-on-year, slightly missing the 4.2% projection.

The urban unemployment rate remained steady at 5% in May, consistent with April's rate and marking a 0.2 percentage point improvement from May last year.

In monetary policy, the People's Bank of China maintained its one-year medium-term lending facility rate at 2.5% on CNY 182bn (£19.8bn) of loans, aligning with market expectations.

The central bank also injected CNY 4bn through seven-day reverse repurchase operations, keeping the seven-day interest rate unchanged at 1.8%.

Reporting by Josh White for Sharecast.com.