Asian stocks were mostly lower on Monday, with U.S. futures mixed and oil prices falling. Weak Chinese lending data and news of the U.S. government planning to raise tariffs on Chinese exports were impacting sentiment. Japan’s Nikkei 225 shed 0.4%, Hong Kong’s Hang Seng rose 0.5%, and the Shanghai Composite index edged lower. Chinese inflation data showed a rise in April, while new loans fell significantly from the previous month. Reports of the Biden administration planning to raise tariffs on various Chinese imports, including electric vehicles and semiconductors, also affected the market.
The proposed tariffs on electric vehicles led to selling of some automakers, with stocks of Chinese EV maker BYD dropping 0.6% and NIO slumping 2%. South Korea’s Kospi and Australia’s S&P/ASX 200 experienced losses, while Taiwan’s Taiex gained after leading computer maker TSMC reported a surge in revenue. In the U.S., the S&P 500 closed higher on Friday, marking a third straight winning week. The Dow Jones Industrial Average and Nasdaq composite also saw gains. Strong reports on profits from U.S. companies and hopes of a Federal Reserve interest rate cut boosted the market.
Gen Digital reported better-than-expected profits for the first quarter of 2024, leading to a 15.3% jump in its stock price. The company also announced a buyback program of up to $3 billion. Novavax nearly doubled and soared 98.7% after securing a deal with Sanofi worth over $1.2 billion for co-commercializing its COVID-19 vaccine. However, Akamai Technologies saw an 11% drop in its stock price despite exceeding profit expectations. In the bond market, Treasury yields rose following a discouraging consumer sentiment report from the University of Michigan, signaling weakening sentiment among U.S. consumers.
The report also indicated rising inflation expectations among consumers, which could potentially worsen inflation in a vicious cycle. Energy trading saw U.S. crude losing value to $78.06 a barrel, while Brent crude dipped to $82.53 a barrel. In currency trading, the U.S. dollar edged up against the Japanese yen and the euro. The market downturn was largely influenced by a combination of weak Chinese economic data, proposed tariffs on Chinese imports by the U.S. government, and concerns over rising inflation and consumer sentiment in the U.S. Despite these challenges, some companies like Gen Digital and Novavax reported positive news that boosted investor confidence amidst the broader market uncertainties.
