Asian stocks sluggish before more rate cues; China buoyed by positive trade data

Investing.com-- Most Asian stocks moved in a flat-to-low range on Thursday amid a dearth of direct trading cues and as markets awaited more comments from Federal Reserve officials and key U.S. inflation data in the coming days.

Chinese markets were among the few gainers for the day, extending gains after data showed a substantially bigger-than-expected increase in Chinese imports through April, reflecting some strength in local demand.

Regional markets took few cues from a middling overnight close on Wall Street, as a string of Fed officials warned that interest rates will remain higher for longer. U.S. stock index futures were flat in Asian trade. 

Chinese stocks extend gains as imports surge

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose about 0.9% each on Thursday, increasing their intraday gains and remaining close to six to seven-month highs.

Gains in mainland stocks also drove up Hong Kong’s Hang Seng index, which rose 1.2%. Investors were also seen piling into Hong Kong and Chinese technology shares.

Trade data on Thursday showed that China's imports grew substantially more than expected in April, drumming up some hopes over improvement in domestic demand.

While exports also grew more than expected, the spike in imports saw China's trade balance miss expectations in April. Still, the stronger import data factored into optimism over a potential recovery in the Chinese economy, which was also a key driver of recent gains in Chinese stocks.

Broader Asian markets were mixed. Japan’s Nikkei 225 rose 0.3% as weak wages data for March pushed up expectations that the Bank of Japan will have limited headroom to tighten monetary policy.

The Nikkei also shrugged off losses in Toyota Motor (TYO:7203) (NYSE:TM) , which fell 0.7% on a disappointing earnings outlook for the current fiscal year, even as it clocked stellar earnings for fiscal 2024. 

SoftBank Group Corp. (TYO:9984) fell 1.7% after its British chip designing unit Arm Holdings (NASDAQ:ARM) offered an underwhelming annual earnings forecast, indicating that demand from artificial intelligence may not be as strong as initially expected.

Australia’s ASX 200 sank 0.7%, as heavyweight mining stocks were weighed down by weakness in commodity prices. South Korea’s KOSPI shed 0.3%, while futures for India’s Nifty 50 index pointed to a largely muted open, amid continued uncertainty over India’s 2024 general elections. 

Fed speakers, US inflation data on tap

More Fed officials are set to speak later on Thursday and Friday, after several officials warned that week that U.S. rates were likely to remain high for longer. 

San Francisco Fed President Mary Daly is set to speak later on Thursday, while Chicago Fed President Austan Goolsbee will speak on Friday.

Beyond the Fed speakers, key consumer price index inflation data for April is due next week. Increased insight into U.S. rates is likely to drive the leg of movement for stock markets.