Iron ore imports into China experienced a notable downturn in May, falling short of market forecasts with a 4.9% decrease compared to the previous month of April.
This decline reflects a cautious procurement strategy adopted by Chinese steel mills, who strategically reduced their acquisitions of seaborne iron ore shipments.
Consequently, the import figures for May underscore a proactive measure by the steel industry to align with anticipated shifts in demand dynamics, signaling a responsive adjustment to potential market conditions.
Official data released on Monday by the General Administration of Customs revealed that last month, the nation consuming the most iron ore globally imported 98.13 million metric tons of this crucial steel production component.
Imports miss expectations
May’s iron ore volume fell short of the projected 100 million tons by analysts.
The reported volume also lower than April’s 103.14 million tons and the 102.03 million tons recorded in May 2024.
Several steel manufacturers and market experts attribute last month’s reduced import figures to a strategic shift, according to a Reuters report.
These producers opted to source materials from ports offering ample supplies and more competitive pricing.
Portside inventories declined by 2.8% month-over-month to 133 million tons as of May 30, marking the lowest point since February 2024, due to reduced import volumes.
May imports were lower than anticipated and April imports were higher than anticipated due to some vessels receiving early customs clearance around the May Day holiday, Steven Yu, a senior analyst at Mysteel consultancy told Reuters.
Chu Xinli, an analyst at broker China Futures was quoted in the report:
While May volume is lower than our expectations, it remained at a relatively high level thanks to restocking from mills amid falling portside inventory.
China’s iron ore imports experienced a notable downturn in the initial five months of 2025.
Specifically, from January through May, the nation imported a total of 486.41 million tons of iron ore.
This figure represents a 5.2% decrease compared to the volume of iron ore imported during the corresponding period in 2024.
Steel exports
May saw China’s steel product exports reach a seven-month peak of 10.58 million tons, marking the third consecutive month exceeding 10 million tons.
This figure represents a 1.15% increase from April and a 9.87% rise year-over-year.
Through the first five months of the year, exports surged 8.9% compared to the same period last year, achieving a record high for that timeframe at 48.47 million tons.
China saw its steel imports drop significantly last month, declining 24.5% compared to the same period last year, totaling 481,000 tons.
Over the initial five months of the year, imports decreased by 16.1% from the previous year, reaching 2.55 million tons in total, the data showed.
The United States and China are set to reopen high-stakes trade negotiations in London on Monday, aiming to revive a fragile truce on tariffs and technology restrictions after weeks of recriminations.
The meeting follows a phone call last week between President Donald Trump and Chinese leader Xi Jinping that both sides described as constructive.
The renewed dialogue is focused on easing export controls and restoring the flow of critical materials, particularly rare-earth minerals, after a breakdown in talks that began in Geneva last month.
Since then, relations between the world’s two largest economies have soured, with the US accusing China of withholding key exports, and Beijing bristling at Washington’s clampdown on advanced technology.
The new round of negotiations came after Trump said his phone conversation with Xi on Thursday mainly focused on trade and had “resulted in a very positive conclusion for both countries”.
China, in turn, announced that Vice Premier He Lifeng would travel to the UK from June 8 to 13 for discussions under the “China-US economic and trade mechanism.”
Over the weekend, Beijing also approved certain applications for rare-earth exports, though it stopped short of disclosing details about the recipients.
Kevin Hassett, head of the National Economic Council, emphasized that the US wants a swift return to normal trade in rare earths.
“We want the rare earths, the magnets that are crucial for cell phones and everything else to flow just as they did before the beginning of April, and we don’t want any technical details slowing that down,” Kevin Hassett, head of the National Economic Council at the White House, said Sunday on CBS’s Face the Nation.
“And that’s clear to them.”
Stumbling blocks remain after Geneva deal falters
In May, both countries struck a tentative agreement in Geneva to temporarily lower tariffs that had risen to over 100%.
However, talks soon stalled, with each side accusing the other of backtracking.
The US was particularly alarmed by a drop in rare-earth magnet shipments used in electric vehicles and military hardware.
China, meanwhile, protested new American restrictions on AI chips, chip design software, and visa curbs affecting over 280,000 Chinese students.
Monday’s negotiations in London will bring together US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.
Their Chinese counterparts will be led by Vice Premier He.
Observers note the presence of Lutnick — key architect of technology export curbs — as a sign the White House is open to revisiting measures that have rattled Beijing’s economic ambitions.
Uncertain path to progress as tariffs loom
Although Wall Street responded with guarded optimism following the Trump-Xi call, few expect a breakthrough.
Analysts at Bloomberg Economics cautioned that unlike the Geneva talks, there’s no urgency to reduce tariff levels and the talks are likely to be bogged down by thornier issues.
“This time around there’s no such low-hanging fruit,” Adam Farrar and Michael Deng of Bloomberg Economics wrote in a report ahead of the talks, the publication said.
“With more complex issues on the table, it will be harder for either side to walk away with meaningful new outcomes.”
The White House has hinted that if no deal materializes, Trump will reinstate higher tariffs in August.
That would mark a return to the more punitive duties announced in April, reversing the temporary reprieve granted after the Geneva framework.
China’s official tone has softened, with a Xinhua commentary urging the US to abandon its “security lens” on economic issues.
Still, it acknowledged that both nations share “extensive common interests” and called the economic relationship one of “mutual benefit and win-win results.”
Economic pressures on both sides
Behind the negotiating table, domestic pressures weigh on both leaders.
Trump, seeking re-election, is eager to show progress on trade.
Xi, facing economic headwinds ranging from deflation to youth unemployment, also has incentives to stabilize relations.
Despite tightening rare-earth exports, China appears open to engagement, with Xi reportedly telling Trump that he hopes to see the US “withdraw the negative measures it has taken.”
After their call, China’s foreign ministry said Trump extended a welcome to Chinese students — a gesture seen as symbolic amid broader tensions.
“It would be my honor to welcome them,” Trump later said.
Still, as the London talks begin, seasoned observers remain cautious.
“The US and China “just want to get back to where they were in Switzerland with a few more agreements down on paper to actually understand what is gonna be licensed, what gets permitted, what doesn’t,” said Josh Lipsky of the Atlantic Council.
Whether that clarity emerges in London remains to be seen.
Ford once promised that it would launch a fully autonomous vehicle in 2021. None of these things happened.
The hype was not without substance. Billions were poured into autonomous vehicle (AV) startups.
Argo AI, which was backed by Ford and Volkswagen, hired thousands of engineers before being shut down in 2022.
Apple spent years and reportedly over $10 billion trying to build a self-driving car before scrapping the project in early 2024.
GM also scrapped its Cruise project in late 2024, after spending $10 billion since acquiring it 8 years earlier.
At the end of the day, technological ambition and real-world complexity will stand in the way of every promising, life-changing innovation.
Making a car stay in its lane on a highway is not that hard. But giving a vehicle the judgment and decision-making ability of a human driver in a chaotic urban environment is something else entirely.
The complexity of unpredictable events that require human intuition have stalled even the most advanced players.
Who’s actually doing it now?
As of mid-2025, only a handful of companies are deploying real autonomous services, and nearly all of them are limited in scope.
Alphabet-owned Waymo is the clear frontrunner. It has launched driverless robotaxi services in five US cities, including Phoenix and San Francisco.
But even Waymo’s service operates in carefully geo-fenced zones with good weather conditions and controlled traffic patterns.
There are no Waymo cars driving themselves through snowstorms or chaotic rural highways.
In China, Baidu’s Apollo Go and WeRide are rolling out robotaxis in major cities like Beijing, Shanghai, and Shenzhen. Pilot zones have expanded to 20 cities.
Goldman Sachs expects China to have over 500,000 robotaxis by 2030. But here too, the rollout is managed tightly by local governments. Safety, liability, and data regulations are still being drafted.
Tesla remains the most controversial name in the space. For a company claiming to be using a “Full Self-Driving” system, that system is not really autonomous.
It’s an advanced driver-assistance system (Level 2), requiring full driver supervision.
The system will be remotely supervised, but the company hasn’t demonstrated a fully autonomous vehicle that can operate independently across diverse road conditions.
The US still operates under a self-certification model where companies claim their vehicles meet standards.
In contrast, the EU uses type approval, where regulators independently verify safety.
But perhaps that’s changing, as the European Commission now considers easing AV rules in exchange for tariff relief in trade talks with the US.
It’s a remarkable policy shift, one that suggests economic pressure may be reshaping regulatory priorities faster than safety can keep up.
Why is it still so hard?
Technically speaking, the problem is not just software. It’s the entire system architecture. A true Level 4 or Level 5 system needs to operate safely even when something fails.
This is known as fail-operational design. It requires redundancy at every level: hardware, sensors, compute units, and decision layers.
Most automakers use a blend of sensors: cameras, radar, and increasingly lidar. Lidar uses lasers to map the environment in 3D and can function in low light or poor weather.
Tesla, however, uses a vision-only approach. Musk argues that human drivers use only vision, so cars should too.
Critics say that’s a flawed comparison. Humans compensate for lack of visibility using context, experience, and intent. Machines don’t have that.
Tesla claimed the cameras were not blinded, thanks to a photon-counting breakthrough, but the footage told a different story. The vehicle did not brake until it was too late.
The agency is now reviewing whether that fix was enough.
In China, regulators are moving in the opposite direction. Following a fatal crash by a Xiaomi SU7 in March, Beijing has decided to “hit the brakes.”
The Ministry of Industry and Information Technology announced plans for new safety rules.
There’s growing pressure to create a unified legal framework that addresses insurance, liability, and the problem of over-the-air software updates that alter how vehicles behave after they leave the factory.
Is the business even worth it?
The robotaxi model faces a brutal cost challenge. Waymo’s sensor suite on its Jaguar I-Pace costs around $9,300 per vehicle.
Tesla’s vision-only stack costs about $400. That’s a 23x difference. Tesla’s approach is cheaper and easier to scale, but critics argue it’s less safe.
Robotaxi companies must also contend with vandalism, city regulations, and operational costs.
The trucking sector may be more viable in the near term. Comapnies like Aurora and Torc are testing hub-to-hub automation on highways, where conditions are more predictable.
McKinsey projects that 13% of US trucks will be autonomous by 2035.
Europe is also looking in the same direction. PWC projects that by 2030, about 30% of new trucks in Europe could be autonomous on fixed routes. It’s a simpler problem than city streets.
Insurance is another unresolved issue. When a car is partly controlled by software and partly by a human, who’s responsible in a crash?
China is trying to develop a national system, while the US leaves it to states and insurers.
Analysts believe it could take five to ten years before pricing models are fully established.
So will full self-driving ever happen?
The answer is probably yes; but not in the way people once imagined.
The dream of a car that picks you up anywhere, drives anywhere, and never needs your help is not going to arrive in the next five years.
Maybe not even in the next ten.
We are not heading toward full autonomy. We are headed toward highly capable, tightly constrained autonomy.
Robotaxis in controlled zones. Trucks on predictable routes.
Cars that can drive themselves on highways but hand control back in cities. That’s not nothing. But it’s not what was promised.
Ambitious projections and promises should be taken with a grain of salt. It was 2015 when most companies were ecstatic about FSD tech.
The AV industry over-promised and under-delivered for the past decade.
The hype pulled in capital, headlines, and billions in R&D.
It also fed unrealistic public expectations. Today, engineers are solving hard problems. Regulators are waking up. And companies are adjusting to reality.
Full self-driving won’t be a switch flipped overnight. It will be a slow rollout of use-case-specific systems with tight rules, limited conditions, and lots of humans still involved.
That’s where we are now, and that’s where we’re likely to stay.
The Hang Seng Index jumped by over 1% on Monday morning as traders looked forward to the upcoming talks between China and the United States. The blue-chip index rose to H$24,135, a 6.4% increase from th lowest point last week and 25% above the lowest level in April.
China and the US trade talks
The Hang Seng Index, which tracks the biggest companies in Hong Kong and mainland China, rose on Monday and is eying the highest point this year.
This surge mirrored the performance across Asian countries, with the Nikkei 225 and Nifty 50 being in the green.
The rally is mostly because of the rising hopes that the US and China will lower temperatures again during a meeting with the US officials, like Scott Bessent and Howard Lutnick.
It comes at a time when market participants are watching the developments between the US and China. The US has accused China of violating the terms of the previous agreement by restructuring rare earth metal shipments.
China has been aggrieved by the US, which has made some unilateral decisions targeting its businesses and individuals. The US has restricted the shipping of some aircraft software and semiconductors, a move NVIDIA has warned will hit it by about $8 billion a quarter.
Therefore, the hope is that the meeting will lower the temperatures, make progress on a deal, and lead to a meeting between Trump and Xi Jinping. Such a deal will benefit the stock market by lowering tensions between the two countries.
Technology stocks leads gains
The Hang Seng Index rally was broad-based, with most companies being in the green.
Technology companies were some of the best performers in the Hang Seng Index. Kuaishou Technology, a company that offers video social media solutions, was the best gainer on Monday, soaring by over 6%.
This surge came after the company said that its AI video-generation solution, Kling A, will generate an annual revenue of $100 million by February. This will make it one of the best video generators globally, a notable thing as investors assess how companies are monetizing AI services.
Meituan share price jumpedby over 5% as the company continued expanding its delivery business. For example, the firm plans to expand its drone services in Dubai, an area it sees a lot of potential in. Its recent results showed that its sales rose by 18% in the last quarter.
The other top gainers in Hong Kong were companies like JD.com, Alibaba Health, Trip.com, and NetEase.
On the other hand, the top laggards were companies like Zijin Mining, China Petroleum, China Hongquao Group, BYD, Geely, and China Resources were some of the top laggards.
The daily chart shows that the Hang Seng Index has been in a bull run since January 2024, when it bottomed at H$14,785. It then jumped to over H$24,000 on Monday as most companies recovered.
The Hang Seng Index moved above the key resistance level at H$23,893, its highest point on May 20, invalidating the double-top pattern.
Most oscillators have all pointed upwards, a sign that it is gaining momentum. Therefore, it is likely that the index will keep soaring, as investors target the year-to-date high of H$24,868. A move above that level will signal more gains, potentially to the psychological point at H$25,000.
The Nikkei 225 Index rallied by over 1% on Monday after Japan published weak GDP numbers and as traders remained optimistic about the upcoming US and China trade talks. It jumped to a high of ￥38,137, up by over 23% from its lowest level in April, meaning it is in a technical bull market.
Japan GDP data
The Nikkei 225 Index, which tracks the biggest Japanese companies, rose after the country published the second estimate of GDP data.
These numbers showed that Japan’s GDP contracted by 0.2% in the first quarter after growing by 2.2% in Q4. It stagnated at 0% on a QoQ basis after growing by 0.6% in the previous quarter.
Japan attributed the slowdown to weak external demand, which contracted by 0.8% during the quarter. This slowdown was offset by a 3.3% increase in private consumption and a 1.1% jump in capital expenditure.
These numbers mean that the Bank of Japan (BoJ) will be cautious about interest rates. It has already delivered three interest rate hikes since 2024, and officials have hinted towards more as inflation remains sticky. With the economy slowing, it is possible that Japan will hold interest rates steady, benefiting Japanese stocks. A Bloomberg analyst said:
“The narrower contraction in Japan’s first-quarter GDP compared with the preliminary reading doesn’t change the broader picture — fragile growth complicates the Bank of Japan’s path toward policy normalization.”
Japan’s GDP led to lower government bond yields, with the ten-year falling to 1.48%, down from this month’s high of 1.588%. The Japanese yen also remained in a tight range, with the USD/JPY pair trading at 144.80.
This meeting comes a month after the two sides met in Switzerland and agreed to ease tensions that have been lingering in the past few months.
The first meeting led to some concessions, including lowering tariffs from triple digits to double digits.
A trade deal between the US and China would be a good thing for most stocks, including those in the Nikkei 225 Index.
For one, a deal would raise the possibility of the US and Japan reaching a trade agreement that leads to lower tariffs on goods entering the US. It would also remove one of the factors clouding the world economy.
The other top catalyst for the Nikkei 225 Index will be the upcoming US inflation data on Wednesday. This is an important report that may impact the next actions by the Federal Reserve. A lower-than-expected inflation figure will be good for the Nikkei 225 Index and other global stocks as it will increase the odds of Fed cuts.
Most Nikkei 225 Index companies rose on Monday, with Otsuka Holdings, Advantest, SoftBank, Recruit, Fujitsu, Fujikura, and Mitsubishi Electric being the top gainers.
The daily chart shows that the Nikkei 225 Index has staged a strong recovery in the past few weeks, moving into a bull market. It bottomed at ￥30,802 in April and then bounced back to ￥38,000.
The index has jumped above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control for now.
It has also formed an inverse head and shoulders pattern, a popular bullish reversal sign.
Therefore, a move above the neckline at ￥38,550 will validate the H&S pattern and point to more gains, potentially to last year’s high of ￥42,390. A drop below the support at the 200-day EMA at ￥37,440 will invalidate the bullish outlook.
The Zimbabwe ZiG currency has remained under pressure this year despite some bullish tailwinds for the economy. The official USD/ZWG exchange rate was listed at 27.6 by the central bank, while the black market rate stood at 40.
This performance marks a major deterioration for a currency that started trading at 13.56 against the US dollar in April last year.
Zimbabwe economic tailwinds
Zimbabwe’s economy is facing some major tailwinds this year. First, the prices of its top exports are in a strong rally this year. Gold price surged to a record high, and analysts are optimistic that it will continue soaring in the coming months. Some experts see it rising to $4,000.
Platinum price has also jumped to the highest point since June 2021. It has soared by over 40% from its lowest point this year, and the trend may continue soaring, with the next point to watch being at $1,337.
Similarly, palladium price soared to $1,045, its highest point since November 4. This is notable since these are some of Zimbabwe’s biggest exports.
Second, Zimbabwe expects that tobacco will resume growth this year. In a report in March, the government predicted that tobacco sales would jump by 21% this year as it recovers from last year’s drought. It expects the crop production to be 280 million kilograms after plummeting to 230.9 million last year.
Zimbabwe also expects that the country will have a 340% increase in crop production this year. Its food reserves have remained steady in the past few months.
Further, from a macro level, the government is counting on a bridge loan of about $2.6 billion to help it repay loans to institutions like the World Bank and the AfDB. While some countries are non-committal, the government hopes that it will secure the funds by next year.
Why the Zimbabwe ZiG currency has crashed
The Zimbabwe ZiG has crashed for several reasons. First, despite the central bank’s efforts, Zimbabwe is still a dollar-based economy, with the currency being used in over 80% of transactions.
Second, many Zimbabweans are, rightfully, afraid of holding a local currency following the past implosions. The country has had five currencies in the past decades, all imploding.
Fears that the gold-backed ZiG currency would crash were confirmed last year when the central bank devalued the currency by 40%, leading to instant losses among those who held it.
The fact that Zimbabweans are avoiding the ZiG is notable because of the high interest rates the central bank is offering. It raised interest rates to 35%, creating an instant carry trade opportunity, where investors borrow money in a low-interest-rate currency to invest in a higher-yielding one.
In Zimbabwe’s case, one can borrow the US dollar and pay about 5% and then invest in the ZiG, generating a 30% return. In a recent note, one analyst said that monetary policy will not fix the Zig, saying:
“Monetary policy won’t fix Zimbabwe’s problems and the government needs to generate more revenue and control deficit spending to get the economy on track.”
The Zimbabwe Central Bank introduced the ZiG in April 2024 as it sought to create a stable currency. The fear, however, is that most people and businesses will avoid the currency since they have lost money before.
Crypto prices held steady on Monday morning as investors eyed the upcoming US and China trade talks and the US consumer inflation data. Bitcoin price was trading at $105,500, while the market capitalization of all tokens stood at $3.3 trillion. This article provides a forecast for top tokens like Quant (QNT), Bonk (BONK), and Hedera Hashgraph (HBAR).
Quant is a top cryptocurrency project that aims to provide institutions with the technology they need in building programmable money. It recently came into the spotlight after being selected as a participant in the digital euro project.
Quant is also used by top companies like Oracle and Hitachi that deploy its Overledger solution. Overledger allows these companies to build tools that are interoperable across multiple blockchains.
The daily chart shows that the Quant token price has been in a strong rally in the past few months, moving from $58 in April to $118 today. It is hovering at its highest point since January 18 this year.
Quant token remains above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control. Oscillators like the Relative Strength Index (RSI) and the MACD continue rising.
Quant price is attempting to move above the key resistance level at $119.55, a move that will invalidate the forming double-top patter, whose neckline is at $103.25. A double-top is one of the most bearish chart patterns in technical analysis.
QNT token has also moved above the 50% Fibonacci Retracement level. Therefore, moving above that level will point to more gains, potentially to the psychological point at $150. A move below the support at $103.25 will invalidate the bullish outlook.
The Bonk token price has crashed in the past few weeks, moving from a high of $0.00002575 in May to $0.00001554 today. This retreat happened after the token formed a double-top pattern at $0.00002575. It has now moved below the neckline point at $0.00001830.
Bonk price has also plunged below the 50-day and 100-day EMAs, which have formed a mini death cross pattern. It has also formed a small bearish flag pattern, a common continuation sign.
Therefore, the token will likely continue falling as sellers target the key psychological point at $0.000010. The bearish outlook will become invalid if the Bonk price rises above the key resistance level at $0.00001830.
Hedera Hashgraph’s HBAR token has been in a strong downtrend in the past few months, moving from a high of $0.40 in January to $0.1687 today. This plunge coincided with the ongoing decline in the supply of stablecoins on its network, a sign that activity is falling. The supply has dropped to $80 million from $180 million earlier last month.
HBAR price remains below the descending trendline that connects the highest swings since January. It has also remained below the 50-day and 100-day EMA and the support at $0.1705.
Hedera Hashgraph price will likely continue falling, with the next target being at $0.1250, its lowest point on April 7. A move above the resistance at $0.1895 will invalidate the bearish view.
Joby Aviation stock price has been in the spotlight in the past few days after it raised money from Toyota. It also jumped on Friday after the Trump administration announced measures to unleash the drone dominance, including in the eVTOL space.
JOBY was trading at $8.12 on Friday, up by 63% from its lowest point this year. Similarly, Archer Aviation (ACHR) stock jumped to $10.20, up by 9.95% from its lowest point this year.
Why Joby Aviation stock price has risen
Joby Aviation share price rose this month after Toyota, one of the top manufacturers, released $250 million to the company. These funds were part of the previously announced $500 million investment last year.
Joby Aviation hopes to use the funds to fund its obligations, including manufacturing, certification, and other administrative purposes. It also aims to boost its balance sheet, which ended the last quarter with over $812 million in cash and equivalents.
Joby has achieved a lot in the past few years, including on certifications. It has completed most of the certifications and is remaining with the fourth and fifth stages, which include testing and analysis, and show & verify. Joby hopes that it will receive full certification later this year.
The stock also jumped after the White House released a statement in support the industry, noting that:
“The time has come to accelerate testing and to enable routine drone operations, scale up domestic production, and expand the export of trusted, American-manufactured drone technologies to global markets.”
This statement means that the administration will work to speed the approval process for products by Joby Aviation and other companies in the industry.
However, the real impact of the executive order on the business will largely be muted.
Joby is a high-risk and high-reward investment
The reality with Joby Aviation and other eVTOL companies is that they are high-risk and high-reward firms.
They are high-risk companies because the industry is new and their business models has not been tested before. As such, while the estimate is that the eVTOL industry will grow from $0.51 billion in 2024 to $1.75 billion, these numbers are based on assumptions since it is a new industry.
Also, it is still unclear whether Joby Aviation’s business model will work out well in the long term. Joby aims to be an operator of air taxis and a seller of its eVTOL to customers. It has already reached deals with Delta Air Lines for this approach.
Therefore, as a high-risk and high-reward company, its stock price will surge if the business thrives and crash if the business struggles.
One positive is that only a handful of companies are building eVTOLs in the US, meaning that Joby and Archer Aviation may become duopolies in the future.
The daily chart shows that the JOBY share price was trading at $8.12 on Friday, up from the support at $7.66, its highest point in July last year. It has formed a golden cross pattern as the 50-day and 200-day moving averages crossed each other.
Joby has moved above the strong pivot reverse point at $7.8. It has also formed an inverse head and shoulders pattern, a popular continuation pattern.
Therefore, the stock will likely continue rising as bulls target the overshoot point at $10.15, up by 26% from the current level. A move below the support at $7 will invalidate the bullish view.
Most Asian stock markets started the week on a positive note Monday, with investors looking ahead to important trade talks between Washington and Beijing scheduled for later in the day.
Fresh inflation data from China and encouraging revisions to Japan’s economic growth figures also helped lift spirits across the region, signaling an expected higher open for Indian benchmarks like the Sensex.
A sense of anticipation around the US-China trade discussions seemed to give markets a boost.
This came alongside reports suggesting a slight easing in tensions between the world’s two biggest economies.
China has reportedly given temporary approvals for some rare earth exports, and US plane maker Boeing Co. is said to have started delivering commercial jets again to the Asian giant.
Adding to the mix, China released its latest inflation numbers. Consumer prices (CPI) there fell by 0.1% in May compared to a year ago.
While still showing a slight deflation, this was a smaller drop than the 0.2% economists polled by Reuters had predicted. Producer prices (PPI), however, fell by 3.3% year-on-year, a bit more than the 3.2% dip analysts had expected.
Reacting to these developments, mainland China’s CSI 300 index began the day flat, but Hong Kong’s Hang Seng Index gained a solid 0.86%.
Over in Japan, the benchmark Nikkei 225 climbed 0.91%, and the broader Topix index rose 0.58%.
A significant piece of good news for Japan came from revised figures for its Gross Domestic Product (GDP) for the January to March quarter.
The Cabinet Office announced Monday that the economy shrank at an annualized rate of just 0.2%.
That’s a much better picture than the initially reported 0.7% contraction and topped economists’ expectations, as a Reuters poll had thought the figure would stay the same.
Investors are now keeping a close eye on the Bank of Japan’s next moves, especially after it cut its growth and inflation forecasts for the year at its May 1 meeting.
The central bank has a two-day policy meeting scheduled for next week.
Elsewhere in the region, South Korea’s Kospi index jumped an impressive 1.71%, while the small-cap Kosdaq added 0.46%. Australian markets were closed for a public holiday.
Indian markets look to build on Friday’s rally
Indian stock market benchmarks, the Sensex and Nifty 50, are tipped for a higher open on Monday, taking their lead from the positive mood in global markets and fresh optimism about US-China trade talks.
Trends on Gift Nifty also pointed to a firm start for Indian stocks, with Gift Nifty trading around the 25,175 level – a premium of nearly 80 points from Nifty futures’ previous close.
This follows a strong finish to last week for the Indian market. On Friday, stocks rallied, with the Nifty 50 notably closing above the key 25,000 mark.
That surge was largely thanks to the Reserve Bank of India (RBI) cutting its repo rate by 50 basis points (bps) to 5.50% and also trimming the Cash Reserve Ratio (CRR) by 100 bps to 3%.
On Friday, the Sensex had climbed 746.95 points, or 0.92%, to close at 82,188.99, while the Nifty 50 ended 252.15 points, or 1.02%, higher at 25,003.05.
US markets ended last week strong
US equity futures were mostly flat in early Asian trading on Monday.
This came after a solid session on Wall Street last Friday, where all three major benchmarks jumped following better-than-expected non-farm payrolls data.
The US economy added 139,000 jobs in May, the Bureau of Labor Statistics reported, beating the Dow Jones forecast of 125,000, though it was less than the downwardly revised 147,000 jobs added in April.
The Dow Jones Industrial Average climbed 443.13 points, or 1.05%, to close at 42,762.87, having been up by more than 600 points at its highest point in the session.
The broad-based S&P 500 also gained 1.03%, pushing past the 6,000 level for the first time since late February to settle at 6,000.36. The Nasdaq Composite rallied 1.20% to finish at 19,529.95.
The Indian stock market is poised for a positive start, with Nifty futures pointing upwards, still riding the wave of excitement from the Reserve Bank of India’s (RBI) blockbuster monetary policy announcement last Friday.
A generally upbeat mood across Asian equities, driven by renewed optimism about US-China trade talks, is also expected to lend further support to market sentiment. In the local bond market, all eyes will be on short-term yields, where the recent rally is anticipated to continue.
The Reserve Bank of India’s unexpected 50-basis point cut in the repo rate, coupled with a significant cash boost to the banking system, could be just the catalyst needed to spur companies to fast-track their plans for public listings.
Lower interest rates typically reduce the hurdle for equity issuance, making IPOs a more attractive proposition for both companies and investors.
An immediate litmus test for this revived IPO sentiment will be the upcoming public offering from HDB Financial Services, which recently received regulatory approval.
Wall Street doubles down on India, derivatives in focus
The optimism isn’t confined to domestic players.
Wall Street banks are increasingly bullish on Indian equities, positioning the country as a standout performer even amidst the uncertainties clouding global trade.
This positive view is now spilling over into the market for short-term leveraged products.
JPMorgan, for instance, is recommending short positions on one-month Nifty volatility, while Bank of America suggests using now-cheaper hedges to protect existing long positions.
The RBI’s surprise liquidity injection on Friday is likely to further amplify this positive sentiment, adding more fuel to India’s already strong market momentum.
Monsoon woes: early rains cool demand for air-conditioner makers
While financial markets are buzzing, some sectors are facing weather-related headwinds.
It’s not just cement producers feeling the impact; room air-conditioner manufacturers have also been caught off guard by the early arrival of the monsoon season.
According to analysts at Centrum and IIFL, demand for room air conditioners began to taper off as early as April, as the summer failed to live up to the harsh heat predicted by the weather office.
Centrum estimates that industry volumes for the current quarter could be significantly lower, potentially down by 25%-30% year-on-year.
Air-conditioner producers are now pinning their hopes on new energy efficiency norms, set to come into effect in January, to spur some advance buying from consumers looking to upgrade before the changes.
In the meantime, shares of leading players in the sector, such as Voltas, Blue Star, and Epack Durable, have seen declines ranging from 26% to 34% so far this year.
Bond market reacts: short-term yields rally on liquidity boost
The short-term bond market experienced a significant rally on Friday following the RBI’s surprise decision to slash the cash reserve ratio (CRR) by the most in five years.
The central bank estimates this move will inject a substantial 2.5 trillion rupees of liquidity into the system.
Analyst actions
Several stocks have seen rating changes from prominent brokerages:
HDFC Bank: Raised to Buy at ICICI Securities; Price Target (PT) 2,300 rupees.
Kotak Mahindra Bank: Rated New Add at InCred; PT 2,410 rupees.
PNC Infratech: Raised to Buy at ICICIdirect.com; PT 360 rupees.
