Asian Stocks Climb Ahead of US CPI Data, China Trades Mixed

Asian stocks were mainly in the green on Tuesday, recouping recent losses as investors played it safe ahead of the release of the key US consumer inflation data, while Chinese stocks traded mixed as loan activity slowed down.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.21%, while optimism in the tech and automobile sector led Japan’s Nikkei 225 index 0.43% higher. The broader TOPIX index also climbed 0.37%.

Asian equities incurred sharp losses last week as investors shied away from riskier assets due to a series of hawkish signals from the Federal Reserve and disappointing earnings results.

Adding to the weakness were concerns over the loss of momentum in China, the world’s second-largest economy, as lackluster data continued to weigh on sentiment.

The negative impact of the trend was mostly caught by the tech segment, resulting in significant buying on Tuesday.

Australia’s S&P/ASX 200 increased 0.83%, slightly bouncing back from an 11-day low, and was trading near its lowest level in a year.

Data from a private survey signaled more economic headwinds for the country down under. The reading revealed that Australia’s consumer confidence fell 2.6% in November from a 2.9% surge in October.

The data came after the Reserve Bank of Australia (RBA) increased the benchmark interest rates to a 12-year high of 4.35% last week. The data also suggested a slump in retail spending during the holidays.

Focus will now be on the US’s consumer price index (CPI) data, which will be released later in the day and is expected to show some easing inflation through October following two straight months of ending above forecasts.

Chinese Stocks Mixed on Weaker Loan Demand

Chinese stocks took a different route on Tuesday, posting mixed trading as new bank lending declined in October.

The blue-chip CSI 300 index was up  0.07%, while the Shanghai Composite index added 0.31%. On the other hand, Hong Kong’s Hang Seng index stumbled by 0.22%.

Data from the People’s Bank of China (PBOC) showed on Monday that the local banks extended CN¥738.4 billion ($101.3 billion) in new yuan loans last month, a steep drop from the CN¥2.31 trillion logged in September.

However, growth in outstanding yuan-denominated loans was steady at 10.9% year-over-year in October. Still, total social financing (TSF), a broad measure of credit, slipped to CN¥1.85 trillion ($254 billion) in the month from September’s CN¥4.12 trillion.

The figures came after a series of lackluster economic indicators for the previous month and signaled an ongoing slump in China’s economy.

Investors await the country’s industrial output and retail sales data for October, set to be published on Wednesday.