Asian stock markets closed mostly lower on Tuesday, influenced by gains in far-right factions following the European Parliament elections, which introduced further uncertainty into the EU's political landscape. Investors were also awaiting critical U.S. inflation data and the outcome of the Federal Reserve's policy meeting.
Market sentiment seems to lean towards reduced expectations for any easing of monetary policy this year, with many analysts predicting that the Federal Reserve's first rate cut may not occur until November.
The U.S. dollar remained confined within a narrow range, while gold stayed above its one-month low. Oil prices dipped slightly after Monday's 3% surge, driven by anticipations of robust summer fuel demand and possible U.S. crude stockpiles for its Strategic Petroleum Reserve.
China's Shanghai Composite Index fell by 0.76% to close at 3,028.05, as trading resumed after an extended holiday weekend. The electric vehicle sector experienced a decline as traders awaited the European Commission's decision on provisional duties.
In Hong Kong, the Hang Seng Index dropped by 1.04% to end at 18,176.34.
Japanese markets saw modest gains, propelled by a weaker yen ahead of the Bank of Japan's policy meeting scheduled for Friday. It is anticipated that the central bank might either reduce its monthly asset purchases or outline a slow but steady tapering strategy post a two-day meeting. The Nikkei 225 edged up by 0.25% to 39,134.79, while the broader Topix Index dipped slightly by 0.20% to 2,776.80. Leading performers included Kokusai Electric, which surged by 3.8%, and Tokyo Electron, up by 2.2%.
South Korean stocks closed higher with the Kospi climbing 0.15% to 2,705.32, buoyed by gains on Wall Street. Key contributors were LG Energy Solution, which increased by 1%, and Celltrion, which rose by 1.6%.
Australian markets faced sharp declines, led by the materials, gold mining, and property development sectors. Industry giants BHP, Rio Tinto, and Fortescue Metals Group lost between 2%-3%. Gold miners Newmont, Northern Star, and Evolution suffered losses ranging from 3%-6%. The benchmark S&P/ASX 200 fell by 1.33% to close at 7,755.40, marking its largest single-day drop in seven weeks. The broader All Ordinaries Index ended 1.32% lower at 8,005.90.
In New Zealand, the S&P/NZX-50 Index also finished slightly down at 11,785.48.
In the U.S., stock markets posted modest gains in cautious trading as investors braced for upcoming inflation data and the Federal Reserve's policy meeting. The Nasdaq Composite, noted for its tech-heavy composition, rose by 0.4%, while the S&P 500 added 0.3%, achieving new record closing highs. The Dow Jones Industrial Average inched up by 0.2%.
