Asia report: Markets fall on rate concerns, failed Russia rebellion

Stock markets across the Asia-Pacific region ended Monday's trading session mostly in negative territory, as investors remained cautious amid growing concerns about potential interest rate hikes.

The weekend's unsuccessful rebellion by Wagner mercenaries in Russia also had investors on edge, contributing to the mixed market sentiment.

“Asian equity markets showed limited movement following losses on Wall Street Friday, as weak global PMI data and a lack of fresh catalysts kept markets subdued,” said TickMill Group market analyst Patrick Munnelly.

“The weekend news cycle was dominated by the brief uprising of the Wagner Group in Russia.”

Munnelly noted that the Nikkei 225 saw choppy trading, as investors digested the latest summary of opinions from the Bank of Japan (BoJ).

“The summary largely reiterated the central bank's dovish stance, emphasising the need to maintain current monetary easing and the premature nature of any policy shifts.

However, one member suggested that the BoJ should consider reviewing its yield curve control framework in the near future while continuing with easy monetary policy.”

Most markets finish weaker, Seoul a bright spot

In Japan, both the Nikkei 225 and Topix indexes ended the session with modest losses, down 0.25% and 0.2% respectively, to 32,698.81 and 2,260.17.

The energy sector took a significant hit, with Tokyo Electric Power Co losing 4.63% and Kansai Electric Power down by 2.31%.

Meanwhile, Rakuten saw its shares dip by 2.53%.

China's markets saw more pronounced declines, with the Shanghai Composite falling 1.48% to 3,150.62, and the Shenzhen Component dropping 1.68% to 10,872.30.

CIG ShangHai led the losses with a significant drop of 10%, while GuangDong Super Telecom saw a close shave, slipping 9.99%.

Hong Kong's Hang Seng Index also landed in the red, slipping 0.51% to end the session at 18,794.13.

Longfor Properties, JD.com, and Trip.com Group experienced losses of 3.77%, 2.86%, and 2.76% respectively.

South Korea, however, bucked the regional trend with the Kospi index posting a gain of 0.47% to close at 2,582.20.

Hyundai Engineering & Construction and Hyundai Steel were among the day's top performers, up 6.25% and 4.57% respectively.

Down under, Australia's S&P/ASX 200 shed 0.29% to 7,078.70, led by declines in Star Entertainment Group and Mineral Resources, which fell by 3.83% and 3.53% respectively.

Across the Tasman Sea, New Zealand's S&P/NZX 50 also ended the day lower, down 0.84% to 11,638.68, with Ebos Group and Fisher & Paykel Healthcare among the major decliners.

Currency markets saw some movement, with the yen last 0.4% stronger on the dollar at JPY 143.12.

The Aussie was meanwhile 0.09% weaker to trade at AUD 1.4985, while the Kiwi advanced 0.33% on the greenback to change hands at NZD 1.6225.

In the commodities space, Brent crude futures were last down 0.09% on ICE at $73.78 a barrel, while the NYMEX quote for West Texas Intermediate fell 0.25% to $68.99.

Japan service sector maintains growth, Singapore manufacturing contracts

On the economic front, Japan's service sector PPI maintained a growth rate of 1.6% year-on-year in May, matching the growth rate seen in April.

However, the index posted a minor monthly drop of 0.1%, ending at 108.5 compared to April's 108.6.

Elsewhere, Singapore's manufacturing sector faced a considerable downturn, as output fell sharply by 10.8% in May on a year-on-year basis.

It marked as the steepest decline the sector had seen since February 2013.

When the biomedical manufacturing sector was excluded, the year-on-year output fell even further, registering a drop of 13%.

Furthermore, on a seasonally-adjusted month-on-month basis, manufacturing output in the city-state decreased 3.9% in May.

With the exclusion of the biomedical manufacturing sector, the monthly output saw a more significant dip of 8%.

Reporting by Josh White for Sharecast.com.