Asia report: Stocks slip ahead of China loan prime rate decision

Asian equities were primarily down on Monday, with only Australia bucking the trend, amid anticipation of the People's Bank of China's loan prime rate decision due later this week.

“Asian equity markets traded in negative territory overnight as investors reacted to the losses on Wall Street from Friday,” said TickMill market analyst Patrick Munnelly.

“Market sentiment was also tempered as participants absorbed the outcome of US-China talks, and with US markets closed on Monday in observance of Juneteenth.

“The Nikkei 225 remained subdued and breached earlier support around the 33,500 handle.”

Munnelly noted that the Hang Seng and Shanghai Composite also declined as concerns over China's economic growth persisted, further exacerbated by downward revisions of Chinese GDP forecasts for 2023 by institutions including Goldman Sachs, Nomura and UBS.

“Additionally, market participants digested the meeting between US Secretary of State Blinken and Chinese Foreign Minister Qin in Beijing, described as candid, substantive, and constructive, although no significant breakthroughs were reported apart from agreeing to schedule a reciprocal visit at a suitable time.”

Japan's benchmark Nikkei 225 slipped by 1%, closing at 33,370.42 points, while the broader Topix Index dropped by 0.43% to 2,290.50 points.

Toyota Tsusho Corporation led the decliners, tumbling 4.22%, followed by Mitsui Melting and Smelting and DOWA Holdings, which fell by 3.94% and 3.67% respectively.

Chinese indices were also in negative territory with the Shanghai Composite down 0.54% at 3,255.81 points, while the Shenzhen Component dropped slightly by 0.29% to 11,274.05 points.

GuangDong Super Telecom and GuangZhou Baiyun Electric witnessed significant declines, losing 10% and 6.57% respectively.

Hong Kong's Hang Seng Index fell by 0.64% to end the day at 19,912.89 points.

Country Garden Holdings led the laggards, dropping 5.35%, followed by ANTA Sports Products and Li Ning Co., both of which dropped over 3.9%.

South Korea's Kospi slid 0.62% to finish at 2,609.50 points, with LG Energy Solutions and Orion both falling by over 4.5%.

In contrast, Australia's S&P/ASX 200 emerged as the lone bright spot in the Asia-Pacific market, adding 0.6% to end the day at 7,294.90 points.

Abacus Property Group and Star Entertainment Group surged 5.81% and 4.76% respectively.

New Zealand's S&P/NZX 50 dropped 0.42% to 11,750.75 points, with Restaurant Brands NZ and Pacific Edge both down over 4%.

In currency markets, the yen was last 0.02% weaker against the dollar to trade at JPY 141.85, while the Aussie fell 0.12% to AUD 1.4563.

The Kiwi was also weaker against the greenback, retreating 0.14% to change hands at NZD 1.6058.

In the commodities market, both Brent crude and West Texas Intermediate saw modest drops, with Brent crude futures last down 0.57% on ICE at $76.17 per barrel, while the NYMEX quote for West Texas Intermediate fell 0.64% to $71.32.

Reporting by Josh White for Sharecast.com.