Asian stocks flat amid weak China signals, U.S. CPI offers little cheer

Investing.com– Most Asian stocks moved in a flat-to-low range on Thursday as softer-than-expected Chinese inflation data pointed to a slowing economic rebound in the region’s largest economy, while mixed U.S. inflation data also weighed.

China’s and indexes moved less than 0.1% in either direction, as data showed that in the country barely grew, while fell to its lowest level in nearly three years in April.

The reading, which follows from the country this week, raised more doubts over a post-COVID economic rebound in China, and soured sentiment towards its markets.

Weakness in China spilled over into Hong Kong, with the losing 0.2%. But electric vehicle maker Li Auto Inc (HK:) was among the few outliers for the day, up as much as 16% after it logged a bumper first-quarter profit.

Other China-exposed markets also remained under pressure. Australia’s index fell 0.2% as heavyweight, China-dependent mining stocks slid, while the index lost 0.5%.

Japan’s index was flat as investors awaited more quarterly earnings from the country. Technology investment giant SoftBank Group Corp. (TYO:) is set to report its earnings after the bell on Thursday.

Still, the Nikkei was trading close to a nine-month high following a string of robust earnings from the country’s biggest trading houses earlier this month.

Broader Asian markets were muted as traders digested mixed U.S. data. While the reading did ease slightly more than expected through April, it still remained well above the Federal Reserve’s 2% annual target.

inflation also increased, indicating that U.S. price pressures remained sticky and were unlikely to elicit a less hawkish Federal Reserve in the coming months.

While markets widely expect the Fed to during its June meeting, investors are also trimming expectations for a rate cut this year.

The prospect of U.S. interest rates staying higher for longer bodes poorly for risk-driven Asian markets, as monetary conditions tighten across the globe. 

Still, some Asian markets took support from the softer U.S. inflation reading, as well as a strong overnight finish in U.S. technology stocks. India’s and indexes rose slightly in early trade, while South Korea’s added 0.4%.

The rose 0.5% after data showed the grew more than expected in the first quarter.