Investing.com-- Most Asian stocks moved in a flat-to-low range on Monday amid persistent concerns over increased U.S. trade tariffs and high interest rates, with an artificial intelligence-fueled rally in Chinese markets pausing for breath.
Japanese shares took little support from substantially stronger-than-expected gross domestic product data, while Australian markets fell from record highs as the Reserve Bank of Australia kicked off a two-day meeting. The central bank is widely expected to cut rates on Tuesday.
Regional markets took middling cues from Friday’s session on Wall Street, where softer-than-expected retail sales data spurred some concerns over a slowing economy.
U.S. stock index futures rose slightly in Asian trade, although Wall Street will be closed on Monday for a holiday.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.1% each, as did Hong Kong’s Hang Seng index.
Chinese tech shares- especially those in Hong Kong- had rallied sharply over the last three weeks amid increased optimism over the country’s AI capabilities, after the release of DeepSeek R1 in late-January.
While this rally now appeared to have paused, analysts said that Chinese markets still had further to run on AI hopes, especially given that local tech stocks were nursing steep losses over the past three years.
The AI rally still remained in play for some stocks. Tencent Holdings Ltd (HK: 0700 ) surged over 6% after its Weixin app began testing DeepSeek integration.
But sentiment towards Chinese markets was tempered by fears of a brewing trade war with the U.S.
Japan’s Nikkei 225 and TOPIX indexes rose 0.1% and 0.3%, respectively.
GDP data showed Japan’s economy grew much more than expected in the fourth quarter, as strong exports and capital spending offset slower growth in private spending.
The reading boosted the yen, given that strength in the economy gives the BOJ more headroom to keep raising interest rates.
But the GDP data also showed some cooling in private spending , raising concerns over a slowdown in Japan’s biggest economic driver, after stellar growth through the past year.
Still, springtime wage negotiations this year are expected to yield more bumper wage hikes, providing more incoming support to private spending.
Australia’s ASX 200 index fell 0.8% from record highs, largely lagging its regional peers.
Investors locked in some profits before the conclusion of an RBA meeting on Tuesday, where the central bank is expected to cut rates by 25 basis points.
But the RBA is expected to still remain relatively hawkish, given that Australian inflation has shown limited signs of cooling in recent months.
Broader Asian markets were mixed. South Korea’s KOSPI added 0.8% on persistent gains in AI-exposed chipmaking stocks.
Singapore’s Straits Times index rose 0.4% even as data showed the country’s key non-oil exports shrank in January.
Taiwan’s TSMC (TW: 2330 ) rose 1.4% as the Wall Street Journal reported that the chipmaker was considering buying some operations of struggling rival Intel (NASDAQ: INTC ).
Futures for India’s Nifty 50 index pointed to a mildly stronger open, although sentiment towards India was rattled by the prospect of increased U.S. tariffs.