Asian Stocks Rebound Amid Anticipation of U.S. Inflation Data

Most Asian stocks advanced on Monday, recovering some ground from the losses seen last week, driven by anticipation of upcoming U.S. inflation data and interest rate cues.

Wall Street Influence and Regional Gains

Regional markets were buoyed by a strong close on Wall Street last Friday, where gains in technology stocks propelled the NASDAQ Composite to a record-high close. However, U.S. stock index futures fell slightly in Asian trading, with volumes expected to remain low due to the Memorial Day holiday.

China's Market Performance

China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose about 0.1%, showing a mild recovery from last week's losses. Data released on Monday indicated steady growth in Chinese industrial profits for April, suggesting some improvement in one of the country's key industries.

Despite this positive data, gains in Chinese markets were limited due to cooling optimism over recent stimulus measures from Beijing. Although the government has announced various supportive measures for the economy, especially the housing market, analysts remain skeptical about the execution and funding of these initiatives.

Hong Kong and Other Asian Markets

Hong Kong's Hang Seng index fell by 0.4% due to losses in mainland stocks. Gains across most Asian markets were generally modest as investors awaited key U.S. inflation data expected later this week.

Anticipation of PCE Data

Investors are particularly focused on the upcoming Personal Consumption Expenditures (PCE) price index data, the Federal Reserve's preferred inflation gauge, scheduled for release on Friday. This data is expected to significantly influence the outlook for U.S. interest rates.

Last week, dwindling expectations of U.S. interest rate cuts weighed on Asian stocks, as traders largely dismissed the possibility of a rate cut in September. The forthcoming PCE data will be crucial in shaping future market expectations and movements.

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