Asia stocks mixed in choppy trade; Greece, China RRR cut in focus

Investing.com - Asian stock markets were mixed to higher on Monday, as China’s weekend move to loosen monetary policy boosted sentiment, but ongoing concerns over political turmoil in Greece limited any significant gains.

During late Asian trade, Hong Kong's Hang Seng Index dipped 0.4%, Australia’s ASX/200 Index advanced 0.3%, while Japan’s Nikkei 225 Index added 0.25%.

Asian stock markets suffered their worst weekly drop since November of last year last week, as growing fears over an escalation of the debt crisis in the euro zone and disappointing Chinese data prompted investors to shun riskier assets.

Investors continued to monitor political developments in Greece, as the debt-laden country struggles to form a coalition government following last weekend’s elections, fanning fears over a potential default and eventual exit from the euro zone.

Greece’s president is set to launch a final attempt on Monday to form a coalition government, but will have to call another election if he fails.

Sentiment was lifted slightly after the People’s Bank of China cut the Reserve Requirement Ratio, or the amount of cash that banks must hold as reserves, to 20.0% from 20.5%, effective May 18. It was the third cut in six months.

The monetary policy move came a day after a flurry of data showed that the world's second-largest economy was slowing faster than expected.

Shares in Hong Kong fluctuated between modest gains and losses throughout most of the session, with mainland property developers rising on the back of the PBOC move.

Agile Property Holdings saw shares jump 3.3% and China Overseas Land & Investment added 0.8%. Hong Kong property developers were mixed however, with Sino Land shares down 1.15% and Wharf Holdings up 1.2%.

Lenders were broadly lower, despite the RRR-cut. China Construction Bank shares traded down 1.25%, Industrial and Commercial Bank of China slumped 1.45% and Bank of China Hong Kong declined 1.3%.

Hong Kong-based exporters with high exposure to Europe were weaker, with Esprit Holdings dropping 3.8%, Li & Fung slumping 2.4% and Cosco Pacific down 3.1%.

The best performer on the Hang Seng Index was Tencent Holdings, which climbed 3.3% ahead of its first quarter earnings out later this week.

Meanwhile, in Japan, the Nikkei swung between small gains and losses after losing more than 4.5% last week, its sixth consecutive week of losses.

Earnings were in focus once again, with Takeda Pharmaceutical, Asia’s largest drug-maker, dropping 3.3% after profit plunged 50%, missing estimates.

Shares in exporters continued to come under pressure, amid the uncertain global outlook. Automakers Honda and Nissan slumped 0.8% and 2% respectively.

Heavyweight Japanese retailer Fast Retailing, owner of the Uniqlo casual apparel brand, rose 2.25%, offering some support for the Nikkei Average.

Elsewhere, shares in Australia edged higher, after the Australian dollar traded below parity with the U.S. dollar for the first time since December.

Raw material producers were higher, boosted by hopes Chinese measures to boost growth would raise commodity demand.

Mining heavyweights BHP Billiton and Rio Tinto eased up 0.4% and 0.25% respectively.

Looking ahead, the outlook for European stock markets was downbeat, as ongoing political turmoil in Greece fuelled fears that another round of elections is inevitable.

The EURO STOXX 50 futures pointed to a loss of 1.15%, France’s CAC 40 futures indicated a drop of 1.1%, Germany's DAX futures fell 1%, while London’s FTSE 100 futures declined 0.85%.

Later in the day, the euro zone was to release official data on industrial production, while Italy was to hold an auction of 10-year government bonds. In addition, European Union finance ministers were to hold talks in Brussels.