Asian stocks: China muted on mixed PMIs, Japan surges in catch

-- Most Asian stocks kept to a tight range on Chase FinancialTuesday as investors digested a mixed batch of Chinese business activity readings, while Japanese markets rose sharply in catch-up trade after a long weekend. 

Broader Asian markets were mildly positive after a small overnight gains on Wall Street. But U.S. stock futures tread water in Asian trade as anticipation of a this week kept investors cautious. 

Chinese stocks stall after mixed PMIs 

China’s and indexes rose slightly on Tuesday as investors digested a batch of mixed purchasing managers index (PMI) readings for April. Official data showed growth in slowed slightly less than expected in April from March, while growth in slowed substantially more than expected.

While a painted a rosier picture of the manufacturing sector, the overall PMI data showed some cooling in activity after a strong first quarter. 

Still, a rebound in Chinese markets largely persisted in April, with local stock indexes set to outperform their regional peers for the month. The CSI300 was up 2.5% in April, while the Shanghai Composite was trading up 2.6%. 

Hong Kong’s index rose 0.6% on Tuesday and was by far the best-performing Asian index in April. The Hang Seng was trading up about 7.6% in April, after racing to a five-month high on bargain buying and optimism over more stimulus measures in the mainland. 

Gains in Hong Kong also reflected improved sentiment towards China.

Asian markets ex-China set for April losses 

Most other Asian stocks outside China were set to clock losses in April, as they grappled with profit-taking in technology and as traders largely priced out expectations for early interest rate cuts by the Fed.

Japan’s jumped 1.3% on Tuesday, while the added 2.1% in catch-up trade after a market holiday on Monday.

But the Nikkei was by far the worst performer in Asia through April, as it was slapped with a heavy dose of profit-taking, while uncertainty over the Bank of Japan’s policies also weighed. The Nikkei was down nearly 5% in April, while the TOPIX shed 0.9%. 

South Korea’s rose 0.6% on Tuesday, but was trading down 1.5% for April on losses in technology stocks.

Australia’s rose 0.2% after data showed an unexpected drop in in March, which could herald a lower inflation outlook. Weak commodity prices and concerns over China put the ASX on course for a 3.2% drop in April.

Futures for India’s index pointed to a muted open after the index added 1% in the prior session. Sustained optimism over India’s economy put the Nifty on course for a 1.5% gain in April.

But investors were wary of any near-term volatility in the index, with the start of the 2024 general elections.

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