Asian stocks sink on more China weakness; data-heavy week looms

Investing.com– Most Asian stocks fell on Monday tracking weak signals from China, while anticipation of a string of key economic readings this week kept markets largely on edge.

Chinese stocks were the worst performers for the day, with the and SSEC indexes down 1.1% and 0.7%, respectively, after data showed a sustained decline in the country’s . Hong Kong’s index lost 0.7%, weighed chiefly by mainland stocks. 

The readings showed that China’s biggest economic engines remained under pressure, and also came as investor grew impatient over more stimulus measures from Beijing. 

Focus this week is now on key readings from China for November, due Thursday. The readings are expected to offer more cues on business activity, after a surprisingly weak batch of PMIs in October. 

Concerns over China pulled broader Asian indexes lower, given the country’s role as a dominant trading destination for the region. Australian commodity stocks were particularly hit by this trade, which in turn saw the index sink 0.4%. 

Key readings on Australian and are also on tap later this week, and are expected to factor into the Reserve Bank’s plans for interest rates. Governor Michele Bullock had recently warned that inflation may remain stickier than expected in the coming months.

Japan’s fell 0.5%, retreating after racing to 33-year highs last week. A batch of weak PMIs raised concerns over slowing business activity in the country, which is grappling with weak demand in its biggest export markets. Still, the prospect of a dovish-for-longer Bank of Japan has largely underpinned Japanese stocks this year, with the Nikkei on course for an over 8% rise in November.

South Korea’s was flat before a meeting on Thursday. 

Futures for India’s index pointed to a weak open as the index struggled to break back above the coveted 20,000 level. Still, the outlook for the Nifty remained bright, with analysts citing strong economic growth in India as a key driver of positive sentiment.

Inflation, PMIs and GDP cues on tap 

Anticipation of a slew of key economic readings this week kept investors largely averse to risk-driven assets, pressuring Asian stocks. Along with China’s PMIs, markets are also awaiting from the euro zone, after the bloc slipped into a recession, as well as – which is the preferred inflation gauge of the Federal Reserve. 

A second reading on U.S. third-quarter data is also due this week, as are readings on Japanese and .

While easing fears of higher U.S. interest rates had spurred strong gains in Asian markets through November, this optimism was now being dulled by concerns over slowing global economic growth.

A swathe of weak PMI readings from Japan, the euro zone and the U.S. had furthered this notion last week, as the effects of recent interest rate hikes and sticky inflation began to factor into the global economy.

This trend somewhat sullies the outlook for risk-heavy Asian markets, and could invite further weakness in the coming days, especially if investors lock-in recent profits.