Asia report: Markets mostly lower after US inflation print

Asia-Pacific markets mostly dipped on Thursday following the release of higher-than-anticipated US inflation data for March overnight.

Concerns over a potential prolonged period of elevated interest rates by the Federal Reserve weighed on investor sentiment.

“After receiving mostly negative signals from Wall Street on Wednesday, Asian stock markets are mostly trading down on Thursday,” said TickMill market analyst Patrick Munnelly.

“This comes as hopes for a quick interest rate cut by the US Fed diminish following the release of data showing a larger than anticipated rise in US consumer price inflation in March.

“The inflation data also led to a sharp increase in treasury yields.”

Munnelly noted that the Japanese market was experiencing a significant decline on Thursday, continuing its losses from the last session.

“This is in response to the overall negative trends seen on Wall Street the previous night.

“The Nikkei 225 has dropped below the 39,400 handle, with declines in major index components and technology stocks being partially balanced by gains in financial stocks.”

Most markets lower on mixed day for Asia-Pacific region

In Japan, the Nikkei 225 edged down 0.35% to close at 39,442.63, while the Topix managed a modest gain of 0.15% to reach 2,746.96.

Seven & i Holdings, Mitsui Fudosan, and Aeon were among the leading decliners in Tokyo, with losses of 4.8%, 4.02%, and 3.93%, respectively.

China's major indices were in the green, with the Shanghai Composite rising by 0.28% to 3,034.25, and the Shenzhen Component inching up by 0.03% to 9,300.77.

Leading the gainers in Shanghai were China XD Electric and GuangDong GenSho Logistics, both recording increases of 10.04%.

In Hong Kong, the Hang Seng Index slipped by 0.26% to 17,095.03, with Zhongsheng Group, New World Development, and Chow Tai Fook Jewellery experiencing notable declines of 6.25%, 4.3%, and 4.28%, respectively.

South Korea's Kospi index saw marginal growth of 0.07% to reach 2,706.96, with Hyundai Electric & Energy Systems and Kumho Tire registering gains of 9.69% and 9.26%, respectively.

Meanwhile, Australia's S&P/ASX 200 declined by 0.44% to 7,813.60, with Netwealth Group and Sonic Healthcare both seeing losses of 5.03% and 3.97%, respectively.

In New Zealand, the S&P/NZX 50 index edged down by 0.31% to 11,934.31, with Synlait Milk and Eroad experiencing respective declines of 4.84% and 4.49%.

In currency markets, the dollar was last up 0.02% on the yen to trade at JPY 153.19, while weakened 0.17% against the Aussie to AUD 1.5329, and by 0.25% on the Kiwi to change hands at NZD 1.6696.

Regarding oil prices, Brent crude futures were last up 0.31% on ICE at $90.76 per barrel, while the NYMEX quote for West Texas Intermediate increased 0.27% to $86.44.

Consumer prices rise less than expected in China, producer prices meet forecasts

In economic news, China's consumer price index (CPI) and producer price index (PPI) for March both diverged from analysts' expectations.

The CPI rose by a mere 0.1% year-on-year, a significant decrease from the 0.7% increase recorded in February and falling below the 0.4% forecast by economists surveyed by Reuters.

Moreover, on a month-on-month basis, the CPI plummeted by 1%, a stark contrast to the anticipated 0.5% decline.

Along with the CPI data, China's PPI experienced a 2.8% decline in March compared to the same period last year, aligning with market expectations.

The People's Bank of China also made headlines on Thursday, setting the yuan's midpoint fixing rate at CNY 7.0968 per dollar.

That rate stood 1,654 basis points stronger than the estimate from Reuters, marking the largest deviation since Reuters started its estimations in 2018.

Reporting by Josh White for Sharecast.com.