Asian shares fall on expectations of inflation and earnings signals

Investing.com – Most Asian stocks traded in a flat to low range on Monday, following mixed signals from last week’s US jobs data, with attention now turning to a number of major earnings reports as well as signals inflation rates from the world’s stock exchanges of the largest economies.

Regional markets suffered a downturn last week as a U.S. Treasury downgrade, rising Treasury yields and weak economic data from China reduced appetite for risk-based markets.

Chinese shares were the worst performers on Monday, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes falling 0.7% and 0.5%, respectively. Losses on Chinese stock exchanges also caused Hong Kong’s Hang Seng index to decline by 0.2% as investors waited for more concrete stimulus measures from the government.

Investors also locked in gains after strong gains over the past two months, especially in Indian and Japanese stocks.

The Japanese Nikkei 225 index remained unchanged on Monday, while futures contracts for the Indian Nifty 50 index pointed to a slightly positive opening. Both indexes fell sharply last week after hitting multi-year highs in June and July.

Australia’s ASX 200 fell 0.4%, while South Korea’s KOSPI lost 0.1%. Friday’s data showed that U.S. employment fell more than expected in July. However, an unexpected decline in unemployment and strong wage growth indicated that labor market tensions remain, which could attract further interest rate increases from the Federal Reserve.

Major Asian Gains Available This Week

This week we will focus mainly on the earnings reports of some of the largest companies in Asia.

Chinese e-commerce giant Alibaba Group Holding Ltd (HK:9988) (NYSE:BABA) is scheduled to release its June quarter results next Thursday, potentially offering more guidance to Chinese consumers.

Alibaba is also expected to provide more details on its plan to split into six separate companies.

Japanese tech giants Sony Corp (TYO:6758) (NYSE:SONY) and SoftBank Group Corp (TYO:9984) will also report quarterly results this week, while Commonwealth Bank Of Australia (ASX:CBA), Australia’s largest bank, will report its earnings for the year to June 30 on Wednesday.

The main focus will be on how Asia’s biggest companies have coped with rising global interest rates and whether deteriorating economic conditions are now reflected in corporate profits.

This week we will also know inflation and trade data in China

Markets were also awaiting key inflation readings from the US and China this week, with the latter expected to move closer to disinflation as the economic recovery from Covid-19 slows.

China trade data will be available this week, expected to provide greater insight into Asia’s largest economy as it grapples with weakening demand for goods locally and abroad.

Broader markets are mainly focused this week on key US Consumer Price Index inflation data, which is expected to feed into monetary policy and potentially influence future interest rates.

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