^{Photo: IC Markets}

SINGAPORE — Asia-Pacific markets closed Monday’s trading session on a mixed note as investors absorbed a wide range of new economic data and ongoing global trade developments. From China’s underwhelming manufacturing figures to Japan’s industrial strength and U.S. equity momentum, markets across the region responded with varied sentiment.

China’s Manufacturing Weakness Sparks Stimulus Hopes

China’s economy continued to show signs of strain as official Purchasing Managers’ Index (PMI) data revealed a third straight month of contraction in factory activity. The index came in at 49.7 in June, up slightly from May’s 49.5 but still below the 50-point threshold that separates expansion from contraction.

The sub-index tracking new export orders improved to 47.5, up from 44.7, signaling a modest recovery in demand, potentially fueled by a recent easing in U.S.–China trade tensions.

In response, Mainland China’s CSI 300 Index rose 0.37% to close at 3,936.08, amid speculation that Beijing may unveil fresh stimulus measures to support industrial output and consumer demand in the second half of 2025.

Meanwhile, Hong Kong’s Hang Seng Index declined 0.87% to finish at 24,072.28, dragged by tech stocks and property developers, which remain vulnerable to weak mainland economic data and high interest rates.

Japan and South Korea Show Strength in Industrial Output

In Japan, strong May industrial production data contributed to bullish momentum in equity markets. The Nikkei 225 jumped 0.84% to close at 40,487.39, hitting an 11-month high during intraday trading. The Topix index also advanced 0.43% to 2,852.84, with gains led by the tech and auto sectors.

South Korea’s markets also posted moderate gains. The Kospi index rose 0.52% to finish at 3,071.70, while the small-cap Kosdaq remained unchanged at 781.50. Industrial output in South Korea for May slightly beat analyst expectations, helping lift investor sentiment after a challenging second quarter.

Australia Rallies; India Lags Behind

Australia’s S&P/ASX 200 added 0.33% to end the day at 8,542.30, supported by gains in financials and energy shares. Investors also welcomed signals from the Reserve Bank of Australia that suggested a cautious approach toward future rate hikes.

In contrast, Indian equities retreated. The Nifty 50 fell 0.53%, while the BSE Sensex dropped 0.54% as of 1:45 p.m. IST. Analysts cited profit-taking and ongoing concerns about inflation and policy normalization as reasons for the pullback.

U.S. Markets Rally to New Highs

U.S. equity futures rose during Asian trading hours, bolstered by last Friday’s Wall Street rally. The S&P 500 hit a new all-time high, closing 0.5% higher at 6,173.07, surpassing its previous record of 6,147.43. The Nasdaq Composite followed suit, also closing at a record after a 0.5% gain, while the Dow Jones Industrial Average advanced nearly 1%.

This marks a significant recovery from April’s lows, which were driven by intense uncertainty over global trade policy. Analysts warn, however, that the fragile détente in trade negotiations, particularly between Washington and Beijing, still poses a risk to global equities.

Investor Outlook: Volatility Remains High

Markets across Asia are responding not only to domestic indicators but also to the broader global economic landscape, particularly U.S. monetary policy, trade negotiations, and corporate earnings forecasts. As the second half of the year begins, investors remain cautious but optimistic about growth prospects in select sectors like tech, industrials, and infrastructure.

“Despite mixed signals from regional economies, there are opportunities for investors who can navigate volatility,” said Adrian Ng, portfolio strategist at CIMB Asset Management. “The next round of data from the U.S. and China will be key to determining the direction of capital flows.”