Asian shares mixed with Shanghai up as prices data aids easing views

Investing.com - Shares in Shanghai jumped on Tuesday on expectations continued easy monetary policy will continue in the wake of weak prices data for May.

Chinese consumer prices fell 0.2% in May, weaker than the flat reading expected, while producer prices edged down 4.6%, also weaker than the 4.5% decline seen.

The data has been volatile of late and thus waning in importance as to market direction, but the People's Bank of China will take note with some policy reaction possible.

China's National Bureau of Statistics said falling vegetable and egg prices dragged the CPI down by 0.39 percentage points.

The Shanghai Composite gained 2.17%, while the Hang Seng index eased 1.02%. In Sydney, the S&P/ASX 200 was off 0.25% despite solid data on businss confidence and conditions.

In Australia, the National Australia Bank business confidence and conditions index was upbeat. Conditions came in at plus-7 for both, compared to the previous month reading of plus-3 for confidence and plus-4 for conditions.

Also in Australia, home loans rose 1.0% month-on-month in April, beating the 2.0% drop seen.

The Nikkei 225 fell 0.80%.

Overnight, U.S. stocks fell broadly on Monday, as investors continued to digest robust jobs data from last week that could increase the possibility that the Federal Reserve hikes interest rates sooner than previously expected.

While the Dow Jones Industrial Average and S&P 500 Composite Index pared earlier losses in afternoon trading, both fell mildly on Monday to extend last week's downturn. The NASDAQ Composite Index, meanwhile, finished as the session's underperformer as airline stocks weighed. The Dow fell 82.91 or 0.46% to 17,766.55, dropping into negative territory for the year while the NASDAQ lost 46.83 or 0.92% to 5,021.63, continuing its retreat away from near-record levels.

Last week, the Labor Department reported on Friday that the U.S. economy added 280,000 jobs in May, ahead of economists forecast for 220,000.

Hourly earnings increased 0.3% in May, after a 0.2% increase in April.

The upbeat data, particularly the pick-up in wage growth underlined the view that the economy is on track to rebound after a weak first quarter and bolstered expectations that the Federal Reserve could start to hike interest rates at its September policy meeting.

But investors remained cautious after German Chancellor Angela Merkel warned earlier Monday that "there isn’t much time left" to reach an agreement on a cash-for-reforms deal needed to unlock more financial aid before Greece runs out of money.

Athens delayed a key debt payment to the International Monetary Fund on Friday, saying it would repay the money along with other payments due this month by the end of June.