Hong Kong, July 18 (BNA): Asian stocks fell on Tuesday as weak Chinese economic data this week and a lack of stimulus weighed on sentiment, while investors waited to see if US retail sales figures shed light on the Federal Reserve’s policy outlook.
Investors’ focus now swings to the next round of quarterly results this week, as major banks such as Bank of America, Morgan Stanley and Goldman Sachs post profits, Reuters reports.
Tesla also reports later this week, which will allow the market to take a closer look at how big US companies are doing, after stocks’ recent rally.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.56% on Tuesday.
Investors are waiting for clearer signs that inflation is slowing, with readings of US retail sales and industrial production due later on Tuesday.
Economists believe that retail sales in June will show a 0.5% increase from May, which is strong enough to sustain the soft landing scenario without raising concerns about inflation.
“People are still pondering the tug-of-war between growth and inflation. This week we have a number of US economic data that will give a clear indication as to whether further rate hikes are needed,” said Gary Ng, chief economist at Natixis Corporate and Investment. . Bank.
The Federal Reserve, European Central Bank and Bank of Japan conduct policy reviews next week.
After trading was canceled on Monday due to the typhoon, Hong Kong stocks were chasing a decline in Chinese markets caused by data showing that China’s post-pandemic economic recovery is over.
The benchmark Hang Seng fell 1.93% while the technology sector fell 2.09%.
China A shares fell 0.23% on Tuesday. However, Japan’s Nikkei index gained 0.09%.
E-mini futures for the S&P 500 traded almost flat, down 0.03%.
The potential divergence between the Federal Reserve and the European Central Bank on raising interest rates recently has weakened the dollar.
Money markets priced in a 25 basis point rate hike from the Federal Reserve at its policy meeting later this month, although there were expectations that interest rates would come down as early as December.
Conversely, investors expect the European Central Bank and the Bank of England to extend the rate hike cycle.
The US Dollar Index fell slightly to 99.71 in Asian trade, after hitting its lowest level since April 2022 on Friday.
The euro hit a 17-month high of $1.1259, up 0.23%, heading for ninth session gains.
The Bank of Japan (BOJ) holds its monetary policy meeting next week, as investors wait to see if it will start phasing out its ultra-dovish policy.
The benchmark 10-year note was flat, with a yield of 3.7989%.
US crude rose 0.32% to $74.39 a barrel, and Brent crude was at $78.72, up 0.28%.
The spot gold price rose 0.29 percent to $1960.29 an ounce.
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