Asian Shares Mixed As Inflation Worries Return To Fore

Asian stocks turned in a mixed performance on Monday as a surge in oil prices brought inflation and rate hike worries back into focus.

While a closely watched measure of price increases in the United States offered some support, a sharp rise in crude oil prices on the back of surprise output cuts announced by OPEC+ nations stoked fears of a potential resurgence in inflation over the coming months.

Oil prices jumped more than 5 percent in Asian trading after Saudi Arabia and other major oil producers said they would cut production by 1.15 million barrels per day from May until the end of the year.

Chinese shares rose notably, led by major electronics manufacturers, after Beijing launched a cybersecurity probe into U.S. memory chipmaker Micron Technology. China’s Shanghai Composite Index climbed 0.7 percent to 3,296.40.

SG Micro Corp rallied 3.7 percent, while Semiconductor Manufacturing International Corp. jumped 7.5 percent in Hong Kong.

Hong Kong’s Hang Seng Index finished marginally higher at 20,409.18, recovering from an early slide after a private survey showed Chinese manufacturing activity unexpectedly eased in March amid increased headwinds from slow demand.

Japanese shares advanced despite weak manufacturing data and signs of worsening business sentiment among big manufacturers.

The Nikkei 225 Index rose 0.5 percent to 28,188.15, led by energy stocks such as Inpex Corp. and Eneos Holdings. The broader Topix settled 0.7 percent higher at 2,017.68. Chip-related stocks slumped, with Tokyo Electron, Screen Holding and Advantest falling 2-3 percent.

Seoul stocks fell slightly to snap a four-day rally after a survey showed factory activity in the country contracted at the sharpest pace in six months in March.

The Kospi dipped 0.2 percent to 2,472.34, after having hit its highest level since February 9 on Friday. Samsung Electronics, SK Hynix, Kakao and Naver fell 1-2 percent.

Australian markets ended higher amid bets that the Reserve Bank will halt its tightening cycle on Tuesday, though some traders expect a 25 basis point hike.

The benchmark S&P/ASX 200 Index closed 0.6 percent higher at 7,223, extending gains for the sixth day running, led by energy stocks. The broader All Ordinaries Index rose 0.6 percent to 7,416.40. Santos, Woodside Energy Group and Beach Energy surged 2-4 percent.

Investors shrugged off data showing that the manufacturing sector in Australia slipped into contraction territory in March.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index fell 0.4 percent to 11,838.79.

U.S. stocks rallied on Friday after an inflation gauge the Fed follows closely rose slightly less than anticipated in February, helping spur optimism the Federal Reserve will hold off on raising interest rates at its next meeting in early May.

The Dow climbed 1.3 percent and the S&P 500 gained 1.4 percent, while the tech-heavy Nasdaq Composite jumped 1.7 percent to reach a six-month closing high and notch its best quarterly gain since 2020.

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