Uneven Rebound in Industrial Production
Despite the promising GDP growth, other data showed an uneven economic rebound. Industrial production in China missed estimates for the second consecutive month in March, indicating that the country's manufacturing sector is struggling to recover from the impacts of the pandemic.
Hong Kong Property Stocks Underperform
Hong Kong's Hang Seng index fell 0.8%, with property stocks experiencing the most significant losses. This decline was prompted by data showing slowed investment in China's real estate sector during Q1, even though COVID-19 restrictions were lifted.
Strong Retail Sales Support Recovery
Encouraging retail sales data suggests that a consumption-driven recovery in the Chinese economy is progressing, which should benefit exporters to China shortly.
Asian Markets React to Rising US Interest Rates
Fears of increasing U.S. interest rates caused most Asian markets to trade in a flat-to-low range. South Korea's KOSPI dropped 0.3%, while the Philippine Composite Index led losses in Southeast Asia with a 0.6% decrease.
Australian Market Affected by Central Bank's Rate Hike Potential
Australia's ASX 200 index declined 0.3% following the release of the Reserve Bank's April meeting minutes, which suggested that the bank may raise rates further despite a recent pause announcement.
Uncertainty Over Federal Reserve's Rate Hike Cycle
Growing uncertainty surrounding the Federal Reserve's rate hike cycle has negatively impacted broader market sentiment. Higher interest rates limit foreign liquidity and make risk-driven assets less appealing, posing challenges for Asian markets.
Asian Stocks May Find Support from Central Banks
With most Asian central banks pausing their rate hike cycles, there is potential for Asian stocks to find some support in the near term.
Japan's Nikkei 225 Benefits from Bank of Japan's Stance
Japan's Nikkei 225 index rose 0.6%, outperforming other markets after new Bank of Japan Governor Kazuo Ueda indicated that the bank will maintain ultra-low interest rates for now.