Asia-Pacific markets pare gains as investors assess inflation data from India and Japan

Lim Hui Jie & Shreyashi Sanyal

Asia-Pacific markets pared gains hours after opening higher on Tuesday as stocks on Wall Street stumbled overnight, with the Dow Jones Industrial Average snapping an eight-day winning streak.

Investors in Asia assessed India’s inflation numbers. Data released Monday showed consumer price index climbed 4.83% year on year, nearly in line with the 4.8% expected by economists polled by Reuters.

India’s wholesale inflation reading is due to be released later in the day.

Data from the Bank of Japan showed that corporate inflation was steady in April compared with a year earlier, but import prices jumped 6.4% year over year last month, most likely due to the yen’s sharp declines.

Hong Kong’s Hang Seng index was flat, paring from earlier gains of 0.6%, while mainland China’s CSI 300 index reversed gains to trade 0.14% lower.

Japan’s Nikkei 225 and the broader Topix both traded around the flatline.

South Korea’s Kospi dipped 0.1%, while the smaller-cap Kosdaq gained 0.9%.

The S&P/ASX 200 in Australia fell 0.4%.

Overnight in the U.S., traders grappled with rising inflation expectations ahead of key reports due later in the week.

A New York Federal Reserve survey showed consumers last month raised their expectations for price increases. On a one-year basis, inflation expectations rose to 3.3%. Their five-year inflation outlook ticked up to 2.8%.

The 30-stock Dow fell 0.21%, while the S&P 500 inched lower by 0.02%. The Nasdaq Composite added 0.29%.

Shares of meme stock GameStop soared 74% after “Roaring Kitty,” the moniker of the Reddit trader behind 2021′s short squeeze, posted online for the first time in three years.

— CNBC’s Brian Evans and Lisa Kailai Han contributed to this report.

Daiwa Securities shares fall 5% after news of its stake in Aozora Bank

Daiwa Securities Group shares tumbled more than 5% in early trading after the Japanese brokerage firm said it would take a stake in Aozora Bank.

Shares of Aozora Bank jumped 5% before paring gains to trade around 0.1% higher in late morning trade.

The companies said in a filing on Monday that Daiwa will roughly take a 15.38% stake in Aozora for about 51.9 billion yen ($331.8 million).

— Shreyashi Sanyal

Japan’s import prices jump 6.4% in April amid yen weakness

Data from the Bank of Japan showed that corporate inflation was steady in April compared with a year earlier, but import prices jumped last month.

Import prices in April rose 6.4% year over year amid weakness in the yen. This was the biggest jump in import prices since March 2023.

Japan’s corporate goods price index (CGPI), or producer prices, rose 0.9% year over year last month, teh same as in March. The reading was slightly higher than Reuters poll forecast of a 0.8% increase.

The CGPI is a measure of the prices companies charge each other for their goods and services.

— Shreyashi Sanyal

India’s April consumer inflation largely meets expectations at 4.83%

India’s consumer price index grew 4.83% year on year in April, down marginally from the 4.85% recorded in March and slowing for a fourth straight month.

While it was the slowest rate of inflation since June 2023, the figure was slightly above the 4.8% expected by economists polled by Reuters.

India’s statistics ministry said inflation in rural areas grew more sharply at 5.43%, while urban inflation rate came in at 4.11%.

The ministry also added that inflation cooled in clothing and footwear, housing and fuel from the previous month.

— Lim Hui Jie

CNBC Pro: These 3 ETFs have risen by double-digits every year for the past 5 years

Only three ETFs worldwide have produced double-digit annual returns over the past five years, CNBC Pro research has found.

The three funds stood out among 8,300 equity ETFs worldwide screened by CNBC Pro using FactSet data.

Analysts also expect two of the three ETFs to rise by double-digits again over the next 12 months.

— Ganesh Rao

CNBC Pro: 14 analysts upgraded this global AI chip stock in the past 2 weeks

There’s been so much love for one global chip stock that as many as 14 analysts upgraded it in the past two weeks.

The stock’s been soaring on the artificial intelligence boom. It’s up around 35% so far this year, and 60% since a year ago.

— Weizhen Tan

U.S. growth and large-cap stocks have an improved outlook, Barclays says

While value stocks continue to outperform in Europe, growth stocks are currently benefiting from improving forward guidance in the U.S., according to Barclays.

“Rates fell from their recent highs after Fed’s dovish turn, further boosting the outlook for Growth,” strategist Venu Krishna wrote. “We remain Positive on Growth in the US, while being Neutral on Value across both regions given that peak rates are behind us.”

Krishna also reiterated his positive position on U.S. large caps over their smaller counterparts.

“In the U.S., Large caps’ exposure to Quality and Sales/EPS Growth styles (themes we are positive on) along with the interest rate risks facing highly levered small caps lead us to maintain our Positive view on large over small,” he added.

— Lisa Kailai Han

Markets experiencing a ‘Goldilocks-style rally,’ says HSBC

Last week’s equity rally following a rocky period in April indicates the market is moving past its pullback, according to HSBC.

“The dip in risk assets is increasingly in the rear-view mirror as many major equity indices re-approach their year-to-date highs,” strategist Duncan Toms wrote in a Monday note. “These broad-based gains once again resemble a Goldilocks-style rally.”

With investors looking toward Wednesday’s CPI report, Toms believes “the bar for ever more hawkish surprises is getting higher.” Consequentially, the strategist believes even in-line expectations could be another catalyst for risk assets to climb higher.

— Hakyung Kim

Fed’s Jefferson backs ‘restrictive’ interest rate policy

Federal Reserve Vice Chair Philip Jefferson backed the central bank’s current stance of monetary policy, saying Monday that a higher level of interest rates is appropriate until more evidence comes in that inflation is on a sustainable path lower.

“My view is that in light of the attenuation in progress in terms of getting inflation down to our target, it is appropriate that we maintain the policy rate in restrictive territory, which it is right now,” Jefferson said in a question-and-answer session with outgoing Cleveland Fed President Loretta Mester.

The Fed should “continue to look for additional evidence that inflation is going to return to our 2% target, and until we have that, I think it is appropriate to keep the policy rate in restrictive territory,” he added.

As a governor, Jefferson is a permanent voting member of the rate-setting Federal Open Market Committee.

— Jeff Cox

Source : cnbc