Asian Markets Brace for Inflation Data; Hong Kong Shares Rise on Housing Policy

Chinese stocks remained relatively stable as traders awaited crucial inflation data that will likely impact global interest rates. Meanwhile, Hong Kong shares saw an uptick due to China's latest housing policy. The market is keenly focused on the upcoming U.S. core PCE price index report, a key measure of inflation.

Chinese stocks moved in a tight range on Tuesday, as traders awaited key inflation data from major economies this week that could provide clues on the path for global interest rates, while Hong Kong shares rose, following China's latest housing policy. Asian shares held a mixed tone after rallying in the previous session, as rising bets of an imminent European rate cut helped risk appetite ahead of some key inflation data.

The U.S. core personal consumption expenditures (PCE) price index report on Friday will be the biggest focus for the market, as it is the Federal Reserve's preferred measure of inflation. Expectations are for the index to hold steady on a monthly basis. In the latest move, China's commercial hub Shanghai lowered the minimum downpayment ratios for home buyers and relaxed some home purchase restrictions, after the country lowered the national level in a market stabilising effort earlier this month.

"Though it's in a good direction, the overall sentiment channel checks suggest that the recovery in tier-1 cities (except in Shenzhen) is not as strong as it was in last September where the four cities relaxed mortgage restriction," UBS analyst John Lam said in a note. ** At the midday break, the Shanghai Composite index was up 0.01% at 3,124.23.

** China's blue-chip CSI300 index was down 0.26%, with its financial sector sub-index lower by 0.4%, the consumer staples sector down 0.44%, the real estate index down 1.02% and the healthcare sub-index down 0.21%. ** Chinese H-shares listed in Hong Kong rose 0.65% to 6,731.29, while the Hang Seng Index was up 0.57% at 18,934.74.

** The smaller Shenzhen index was down 0.49%, the start-up board ChiNext Composite index was weaker by 0.72% and Shanghai's tech-focused STAR50 index was up 0.31%​. ** The CES CN Semiconductor Index after China set up its third planned state-backed investment fund, largest of the three, to boost its semiconductor industry.

** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.31% while Japan's Nikkei index was down 0.11%.