Asian Shares Slip As China Deflation Deepens

(RTTNews) - Asian stocks ended Thursday's session mostly lower as investors reacted to a mixed bag of corporate earnings from Japan and signs of growing deflationary pressures in China.

The impasse over the U.S. debt ceiling overshadowed softer-than-expected U.S. inflation data.

A measure of China's consumer price inflation reached its lowest level in more than two years in April and factory gate deflation deepened, raising fresh worries about weak demand in the country.

Data showed China's consumer price inflation rose an annual 0.1 percent in April, marking the lowest rate since February 2021. Producer prices declined 3.6 percent from a year earlier, marking the fastest rate since May 2020.

China's Shanghai Composite index dropped 0.29 percent to 3,309.55, with hopes of additional policy support for the economy helping limit the downside. Hong Kong's Hang Seng index finished marginally lower at 19,743.79.

Japanese shares ended little changed as a standoff in Washington over raising the U.S. debt ceiling overshadowed a meeting of finance ministers and central bank governors in the port city of Niigata. The talks are in preparation for a G-7 summit in Hiroshima.

The Nikkei average finished marginally higher at 29,126.72 while the broader Topix index closed 0.14 percent lower at 2,083.09 on the back of mixed earnings reports. Mazda Motor lost 2.7 percent and Sumitomo Metal Mining plummeted 11.7 percent on posting downbeat earnings while Fujifilm Holdings jumped 5.9 percent after reporting better-than-expected results.

Seoul stocks ended lower for a third day running, with tech and energy stocks pacing the decliners. The Kospi average slid 0.22 percent to 2,491.

Australian markets ended a choppy session marginally lower as mining and energy stocks declined, offsetting gains in the financial sector.

Mining heavyweights BHP and Rio Tinto gave up 1-2 percent. Allkem soared 15.7 percent after the lithium miner announced a $10 billion merger with U.S.-listed company Livent.

GrainCorp surged 10 percent. The agribusiness company lifted its earnings guidance despite posting lower half year profits.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index fell 0.83 percent to 11,887.76.

U.S. stocks ended mixed overnight as data showed consumer inflation fell below 5 percent for the first time in two years. So-called core inflation also eased, giving the Federal Reserve room to pause interest-rate increases soon.

The S&P 500 rose half a percent and the tech-heavy Nasdaq Composite rallied 1 percent while the Dow slid 0.1 percent as regional banks extended declines on concerns about the health of the banking sector.