Asian equities mixed as investors react to Chinese economic data

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SINGAPORE — Asian markets struggled to provide direction on Monday, with investors reacting to the release of Chinese economic data, including first-quarter gross domestic product data.

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

Shares in mainland China closed mixed, with Shanghai’s composite falling 0.49% to 3,195.52 and Shenzhen’s component climbing 0.368% to 11,691.47.

China saw faster-than-expected GDP growth in the first quarter, data released by the National Bureau of Statistics on Monday showed. In the first quarter, GDP in China rose 4.8%, ahead of expectations for a 4.4% year-on-year increase.

However, retail sales in March fell by a more-than-expected 3.5% year-on-year. That was against expectations for a 1.6% drop in a Reuters poll.

The data comes as mainland China has been battling its worst wave of Covid in two years for weeks. The large city of Shanghai, in particular, is one of the worst affected areas.

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

“We had the statement from President Xi Jinping in Hainan that persistence is the key, so they will stick with it. As long as that happens, it will continue to put a brake on service activity and obviously jobs related to services and will 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 for a cut in the reserve requirement on April 25. The RRR is the amount of funds that banks are required to keep in reserve.

“This is the smallest cut since China announced its reserve requirement reform in 1998,” analysts at OCBC Treasury Research in Singapore wrote in a note Monday.

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The US dollar index, which tracks the greenback against a basket of its peers, stood at 100,623 and continued its upward pull after a recent rise below 100.

The Japanese yen was trading at $126.54 per dollar after weakening from below 125 against the greenback last week. The Australian dollar stood at USD 0.7364, lower compared to levels above USD 0.747 last week.

Oil prices were lower in the afternoon of trading hours in Asia, with the international benchmark Brent oil futures falling 0.29% to $111.38 a barrel. US crude oil futures fell 0.37% to $106.55 a barrel.

— Evelyn Cheng of CNBC contributed to this report.



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