Asian Stocks Mixed as China, Japan Factory Data Disappoint; India, Korea Decline on Geopolitical Risks

Asian stock markets were mostly flat on Wednesday as investors weighed weak factory activity data from China and Japan, alongside Australian inflation figures and heightened regional tensions.

China’s official manufacturing PMI slipped to 49.0 in April from 50.5 in March, marking the first contraction since December 2023 and signaling pressure from aggressive U.S. tariffs under President Donald Trump. A 145% levy on Chinese goods and declining overseas orders contributed to the downturn, prompting speculation over new stimulus measures. The Shanghai Composite and CSI 300 were largely unchanged, while Hong Kong’s Hang Seng edged up 0.3%.

Japan’s industrial output dropped 1.1% month-on-month in March, surpassing forecasts for a 0.5% decline. Disruptions in auto part supply chains—linked to a 25% U.S. tariff on vehicles and a 10% levy on all Japanese imports—dampened momentum. The Nikkei 225 was flat, while the TOPIX rose 0.4% as markets reopened after a holiday.

In Australia, Q1 CPI data showed a slightly higher-than-expected rise, but core inflation eased into the RBA’s 2%-3% target range. This bolstered expectations for a 25 basis point rate cut at the central bank’s May 20 meeting. The S&P/ASX 200 rose 0.3%.

Elsewhere, India’s Nifty 50 fell 0.2% as geopolitical tensions surged. Pakistan warned of a potential Indian military strike within 24 to 36 hours, following accusations over a deadly attack in Indian Kashmir.

South Korea’s KOSPI also declined after reports emerged that prosecutors raided the private residence of ousted President Yoon Suk Yeol, who was removed from office after declaring martial law last December.

Investors largely shrugged off modest overnight gains on Wall Street as focus remained on upcoming U.S. PCE inflation data and corporate earnings.