Asia-Pacific markets traded in mixed fashion in early Tuesday deals as investors digested a preliminary agreement between the United States and Iran aimed at ending the war in the Middle East.
By 11:30 am AEST (1:30 am GMT), Australia’s S&P/ASX 200 was down 0.4%, Japan’s Nikkei 225 slipped 0.1% despite touching a fresh record high, while South Korea’s KOSPI 200 gained 0.9%.
South Korean defence stocks significantly outperformed the broader market, even after news of the U.S.-Iran agreement.
Hanwha Aerospace, Seoul’s largest defence stock, surged 7.1%, and Hyundai Rotem, the manufacturer of the K2 main battle tank, lifted 6.8%.
Among data releases, a fresh data dump from the National Bureau of Statistics of China (NBS) showed that fixed asset investment fell 4.1%, reversing a prior 5.2% gain and coming in well below market expectations of a 5.2% increase.
Within the breakdown, investment in intellectual property products rose 9.3% year on year, 0.4 percentage points faster than in the first four months of the year.
Infrastructure investment increased 0.6% year on year, while manufacturing investment declined 0.4%. Real estate development fell sharply, down 16.2%.
The property sector also showed continued weakness in activity, with the floor space of newly built commercial buildings sold totalling 313.20 million square metres, down 10.8% year on year.
Total sales of newly built commercial buildings fell 13.5% to 2,936.6 billion yuan.
Industrial production provided a brighter spot, rising 4.5% year on year, accelerating from 4.1% in the previous month and beating expectations for a 4.3% increase.
Sectorally, value added in mining rose 2.3%, manufacturing increased 4.4%, and production and supply of electricity, heat, gas and water climbed 7.6%.
Equipment manufacturing output surged 9.5%, while high-tech manufacturing rose 15.1%, accelerating by 1.2 and 2.3 percentage points, respectively, from the prior month.
Retail sales, however, disappointed, slipping 0.6% after a modest 0.2% increase previously and falling short of expectations for a flat reading.
Market participants are now focused on key interest rate decisions from both the Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA).
The Bank of Japan raised interest rates to a 31-year high, delivering a widely anticipated move as policymakers focused on addressing inflation risks stemming from the Middle East conflict.
At the conclusion of its two-day policy meeting, the central bank voted 7-1 to lift its short-term policy rate to 1.0% from 0.75%.
Governor Kazuo Ueda, who is currently undergoing medical treatment in hospital, did not attend the meeting and was absent from the vote.
The Reserve Bank of Australia is forecast to hold rates steady at 4.35%.
In the United States, major benchmarks closed higher on Monday, with the Dow Jones Industrial Average rising 0.9% to a record high, the S&P 500 gaining 1.7%, and the Nasdaq Composite advancing 3.1%.
Commodity markets also moved sharply in response to easing geopolitical tensions. ICE Brent crude fell 4.8% to US$83.17 per barrel, its lowest level since 10 March, while spot gold rose 2.3% to US$4,309.23 per ounce.
In China, equities rallied on Monday, with the SSE Composite Index adding 1.6% to 4,096.5 and the CSI 300 gaining 2.4% to 4,891.4.
Hong Kong’s Hang Seng Index rose 0.5% to 24,842.7, while India’s BSE Sensex advanced 1% to 76,264.3.
European markets ended mixed on Monday. The UK’s FTSE 100 fell 0.4% to 10,430.6, Germany’s DAX gained 1.1% to 24,894.0, and France’s CAC 40 added 0.4% to 8,384.0.
