Asian stocks mixed as investors react to Chinese economic data

SINGAPORE — Asian markets struggled to orient themselves on Monday as investors reacted to the release of Chinese economic data, including first-quarter gross domestic product figures.

In Japan, the Nikkei 225 fell 1.08% to close at 26,799.71 as shares of Fast Retailing fell 1.25%. The Topix index lost 0.86% to 1,880.08.

Mainland China shares closed mixed, with the Shanghai composite down 0.49% to 3,195.52 and the Shenzhen component climbing 0.368% to 11,691.47.

China saw faster-than-expected GDP growth in the first quarter, according to data released Monday by the National Bureau of Statistics. China’s first-quarter GDP rose 4.8%, above expectations for a 4.4% year-over-year increase.

Retail sales in March, however, fell 3.5% more than expected from a year earlier. That was against expectations for a 1.6% drop in a Reuters poll.

The data comes as mainland China has been battling its worst Covid wave in two years for weeks. In particular, the major city of Shanghai was among the hardest hit areas.

“We know that a big driver of weak consumption is the zero Covid policy,” Johanna Chua, head of Asia economics and strategy at Citi Global Markets Asia, told Street Signs on Monday. Asia” from CNBC.

“We had President Xi Jinping’s statement in Hainan that perseverance is key, so they’re going to stick with that. As long as that happens, it will continue to hold back service business and obviously related jobs. to services and also damage consumption,” Chua said.

The South Korean Kospi fell 0.11% on the day to 2,693.21. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.72%

Monday’s moves in Asian markets came as investors digested Friday’s announcement by the People’s Bank of China of a cut in the reserve requirement ratio on April 25. The RRR is the amount of funds banks must hold in reserve.

“This is the smallest reduction since China unveiled the reserve requirement ratio reform in 1998,” analysts at Singapore’s OCBC Treasury Research wrote in a Monday note.

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The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.623 – continuing its rally after a recent rebound below 100.

The Japanese yen was trading at 126.54 to the dollar after weakening last week below 125 against the greenback. The Australian dollar was at $0.7364, down from levels above $0.747 seen last week.

Oil prices were lower in the afternoon trading hours in Asia, with international benchmark Brent futures down 0.29% at $111.38 a barrel. U.S. crude futures fell 0.37% to $106.55 a barrel.

– CNBC’s Evelyn Cheng contributed to this report.

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