TOKYO — Asian shares traded mixed Monday as investors looked at disappointing economic data from China, as well as rising energy costs and prospects for interest-rate hikes in the U.S.
Japan's benchmark Nikkei 225 NIK gained 0.4% in the morning. SoftBank Group 9984, stock increased despite reports of hefty losses on its investments last week. Fast Retailing 9983, owner of Uniqlo, rose after falling in previous weeks due to concerns about the lock-down in China.
Australia's S&P ASX 200 XJO, edged up 0.2%, while South Korea's Kospi 180721, fell 0.2%. Hong Kong's Hang Seng HSI, lost 0.4% and Shanghai Composite SHCOMP, fell 0.5%. Stocks advanced in Taiwan Y 9999, while markets in Southeast Asia were closed for holidays.
China reported disappointing economic-activity data for April, as COVID 19 lockdowns took a toll. Retail sales fell 11.1% year over year, and industrial production fell 2.9% from a year ago.
Some analysts worry that if the U.S. Federal Reserve raises interest rates too quickly, or too much, that could lead to a recession. A slowdown in the U.S. would almost certainly hurt the Asian region, which exports and manufacturers for the U.S. economy.
The Fed will continue to raise interest rates to keep pace with rising inflation. During much of the coronaviruses epidemic, the benchmark short-term interest rate was at a record low of near zero.
Clifford Bennett, chief economist at ACY Securities, said that many others had spotted the potential recession in 2024, but we have been aggressive from the beginning in our forecast for a U.S. recession this year.
Stephen Innes, managing partner at SPI Asset Management said that investors are watching closely for what Fed Chariman Jerome Powell might say next, even if interest rate increases have been allayed.
That does not mean the bear market is over, especially with the recession on everyone's mind, Innes said.
Wall Street ended the week with a broad rally last week, but the market still had its sixth straight week of drop, the longest weekly drop since 2011.
The S&P 500 SPX rose 2.4% to 4,023. The index is down 15.6% for the year. The Dow DJIA rose by 1.5% to 32,196. The Nasdaq COMP went up by 3.8% to 11,805. Smaller company stocks also staged a solid rally.
The upcoming corporate earnings may provide insight into how inflation is affecting businesses and consumers. Markets have slumped since March due to traders fear the Fed may not succeed in its mission of slowing the economy to rein in the highest inflation in four decades without causing a recession, as many major U.S. retailers report results later this week, including Walmart WMT, Target TGT and Home Depot HD.
In electronic trading, the benchmark U.S. crude CLM 22 lost $1.61 to $108.89 a barrel in electronic trading on the New York Mercantile Exchange. It went from $4.36 to $110.49 on Friday. In currency trading, the US dollarUSDJPY was down to 128.89 Japanese yen from 129.28 yen.