Asian stocks rise with inflation readings on tap; China lags

Investing.com-- Most Asian stocks rose on Monday, extending a rebound from last week amid growing hopes that concerns over a U.S. recession were overblown, with focus turning squarely to a string of key inflation readings this week.

Chinese markets lagged their peers, having mostly missed last week’s rebound rally amid persistent concerns over an economic slowdown in the country. A string of key June quarter earnings are also due this week. 

A market holiday in Japan made for softer trading volumes in Asia, although Nikkei 225 Futures still rose.

Regional markets took positive cues from a strong Friday close on Wall Street, which saw U.S. stock benchmarks erase all of their losses logged last week. U.S. stock index futures fell slightly in Asian trade. 

Focus this week is largely on U.S. consumer price index data, due Wednesday, for more cues on when the Federal Reserve will begin trimming interest rates. Investors are split over a 25 and 50 basis point cut in September. 

South Korea’s KOSPI was the best performer in Asia, up 0.9% on gains in technology stocks. 

Australia’s ASX 200 rose 0.5%, while most Southeast Asian markets rose slightly.

Chinese stocks lag, major earnings on tap

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes  moved in a flat-to-low range on Monday, while Hong Kong’s Hang Seng index fell 0.2%. 

Sentiment towards China remained constrained by persistent concerns over a slowing economic recovery in the country, especially following a string of weak readings for July.

While recent inflation data did show some improvement, it still remained to be seen whether China’s disinflationary trend was reversing.

Focus this week is on earnings from some of China’s biggest internet firms, with Tencent Holdings Ltd (HK:0700), Alibaba Group (NYSE:BABA) (HK:9988) and JD.com (HK:9618) (NASDAQ:JD) set to report their June quarter results this week.

Indian markets eye soft open amid Hindenburg-SEBI showdown 

Futures for India’s Nifty 50 index pointed to a soft open on Monday, as sentiment towards Indian markets was soured by new allegations against India’s securities regulator from short seller Hindenburg Research.

The firm alleged that the head of the Securities and Exchange Board of India, Madhabi Puri Buch, had invested in offshore funds linked to the Adani Group. This comes after Hindenburg had last year taken a short position against Adani over allegations of fraud and share price manipulation against the Indian conglomerate.

SEBI issued an advisory on Sunday, asking investors to remain calm before reacting to any reports from Hindenburg. 

The Nifty and the BSE Sensex 30 were sitting close to record highs after a stellar rally through most of 2024. But this also made Indian stocks more vulnerable to volatility and profit-taking.

CPI data from India is also due on Monday, and is expected to show some cooling in price pressures.