Asia-Pacific Shares Finish Mixed Ahead of US Earnings Announcements

The major Asia-Pacific stock markets finished mixed as recession fears offset expectations of continued tightening by the major central banks. After last week’s sharp sell-offs, the markets had little to grasp on to early Monday.

The trade also seemed a little tentative ahead of inflation news from several countries in the region throughout the week, Australian employment statistics and China GDP and a loan prime rate decision. U.S. earnings season also starts, which could be the source of volatility throughout the week.

On Monday, Japan’s Nikkei 225 Index settled at 26775.79, down 314.97 or -1.16%. Hong Kong’s Hang Seng Index closed at 16612.90, up 25.21 or -0.15% and South Korea’s KOSPI Index finished at 2219.71, up 7.16 or +0.32%.

In Australia, the S&P/ASX 200 Index settled at 6664.40, down 94.40 or -1.40% and in China, the Shanghai Index finished at 3084.94, up 12.96 or +0.42%.

Japanese Shares Pressured Despite Tourism Boost

Japanese stocks fell on Monday as investors braced for more signals of global recession, although tourism-related shares performed well following the border re-opening last week.

High-growth stocks weighed down the index the most, with online medical services company M3 Inc dropping 5.13% and SoftBank Group Corp losing 1.77%.

Last week, Japan reinstated visa-free travel to dozens of countries, ending some of the world’s strictest border controls to slow the spread of COVID-19. Prime Minister Fumio Kishida is counting on tourism to help invigorate the economy and reap some benefits from the Yen’s slide to decades-low.

China, Hong Kong Shares Recover from Early Session Weakness

Shares in China and Hong Kong settled higher on Monday after feeling pressure earlier in the session after Chinese President Xi Jinping talked up national security in a speech on Sunday, while dashing hopes of any changes in growth-hitting zero-COVID policies and property sector curbs.

President Xi called for accelerating the building of a world-class military, while touting the fight against COVID-19 as he kicked off a Communist Party Congress by focusing on security and reiterating policy priorities.

Investors felt that paying more attention to security would mean lower efficiency that would hurt China’s potential economic growth.

Australia Shares Dragged Down by Slumping Miner, Energy Stocks

Australian shares tumbled on Monday, dragged down by mining and energy stocks on weaker iron ore and oil prices, while persistent fears of a possible worldwide recession weighed on investor sentiment.

Leading losses on the benchmark, mining stocks dropped 2.9%, as iron ore prices fell amid worries over demand in top steel producer China. Mining giants Rio Tinto, BHP Group and Fortescue Metals Group fell between 2.8% and 3.2%.

Gold stocks dropped 3.4% to hit their lowest since September 30. Newcrest Mining and Northern Star Resources fell 2.4% and 3.3%, respectively.

Energy stocks lost 2.7% after oil prices fell more than 3% on weak oil demand. Woodside Energy and Santos dropped 2.5% and 3.1%, respectively.