Asian stocks followed Wall Street lower on Wednesday as caution set in ahead of a European Central Bank meeting on Thursday and the all-important U.S. jobs report due out Friday, which could provide some clues about the timing of the Federal Reserve's interest rate hike this year.
Indian shares bucked the downward trend, with the benchmark Sensex breaching the 30,000 mark for the first time ever, after the Reserve Bank of India (RBI) surprised markets with a 25 bps repo rate cut. Chinese shares also closed higher following sharp losses the previous day.
Chinese shares rose as investors looked ahead to the start of China's annual legislature meeting. The benchmark Shanghai Composite index rose 0.51 percent to 3,279.53, rebounding from Tuesday's 2.2 percent loss.
Activity in China's services sector grew moderately in February as new orders rose at their quickest pace in three months, a private survey showed. The HSBC China Services Business Activity Index rose slightly to 52.0 from January's six- month low of 51.8.
Hong Kong's Hang Seng index fell 0.96 percent to close at 24,465.38. Hong Kong's private sector activity expanded at the fastest pace in one year in February, following a marginal deterioration in the previous month, a survey by Markit Economics and HSBC Bank showed.
Japanese shares dropped to a one-week low as the yen strengthened and investors developed cold feet on concerns over valuation following solid gains over the last month. The benchmark Nikkei average fell 0.59 percent to close at 18,703.60, while the broader Topix index shed 0.64 percent to finish at 1,517.01. Sumco Corp plummeted 12.7 percent on equity dilution worries after it filed shelf registration to issue up to 60 billion yen in common shares.
Struggling electronics firm Sharp Corp. slumped 5.3 percent as further details emerged of its plans to request capital infusion from its two main creditors. Rival Panasonic edged up 0.2 percent while Sony Corp shed 0.6 percent. Tokyo Electron shed 3.6 percent after announcing partial changes in its organization structure.
Automakers fell across the board, with Suzuki Motor, Mazda, Toyota, and Honda Motor falling between 0.1 percent and 0.7 percent, while Nissan Motor dropped 1.8 percent. Mitsubishi UFJ Financial, Japan's largest bank, retreated 1.9 percent, Sumitomo Mitsui Financial Group Inc fell 1.6 percent and Mizuho Financial declined 0.9 percent.
Nippon Steel & Sumitomo Metal advanced 1.6 percent. The steel producer said that it would shut a blast furnace in Kokura, western Japan, and spend 1.35 trillion yen to upgrade facilities over the next three years.
In economic releases, Japan's service sector contracted in February after expanding in the previous month, a survey by Markit Economics showed, with the corresponding PMI dropping to 48.5 from 51.3 in January.
Australian shares fell for a second straight session, with banks coming under selling pressure, weighed down by Tuesday's interest-rate decision and weak GDP data. The benchmark S&P/ASX 200 index slipped 0.54 percent to close at 5,901.6, extending Tuesday's 0.4 percent slide. The big four banks fell between 0.4 percent and 0.9 percent. Macquarie Group shares were in a trading halt as the investment bank undertakes a capital raising.
Insurance Australia Group rose 0.7 percent. The company said it faces claims of up to A$90 million due to Tropical Cyclone Marcia, which hit central Queensland on February 20. Financial services provider FlexiGroup rallied 4.3 percent after it bought New Zealand's IT and telco equipment provider Telecom Rentals for A$102.34 million.
Rio Tinto fell 3.7 percent as its shares went ex-dividend. Rival BHP Billiton shed 0.7 percent and Foretescue Metals Group plummeted 5.4 percent after iron ore prices extended their recent losses in overnight trade. Gold miner Newcrest declined 0.9 percent as the price of precious metal remained capped by dollar strength.
Oil & gas stocks like Santos and Woodside Petroleum closed mostly unchanged. Crude prices rebounded on Tuesday as reports of air strikes in Libya and fears surrounding Iran's nuclear program outweighed concerns over record crude inventories. Saudi Arabia, the world's largest crude exporter, raised its official selling price for crude oil for Asian buyers by the most in three years as demand improved.
On the economic front, Australia's GDP grew by a softer-than-expected 0.5 percent in the fourth quarter following a 0.4 percent expansion in the previous three months, official figures showed. Economists expected GDP to rise 0.6 percent. On an annual basis, GDP grew 2.5 percent, matching estimates. Separately, the latest survey from the Australian Industry Group revealed that the country's service sector moved into expansion in February, with a Performance of Service Index score of 51.7, up from 49.9 in January.
Seoul shares followed Wall Street lower as caution set in ahead of major U.S. economic reports due this week. The benchmark Kospi average fell 0.15 percent to 1,998.29. Hyundai Motor fell 1.8 percent on profit taking after rallying 3.1 percent the day before, while its affiliate Kia Motors Corp edged up 0.1 percent, extending Tuesday's 2.6 percent gain. Heavyweight Samsung Electronics rose 1.3 percent. Cosmetics firm AmorePacific dropped 2.8 percent after announcing a 10-for-1 stock split.
New Zealand shares fell as investors locked in some profits in top dividend-paying stocks. The benchmark NZX-50 index dropped 0.33 percent to finish at 5874.08. Meridian Energy retreated 2.5 percent, Mighty River Power lost 2.4 percent and Goodman Property Trust declined 1.3 percent. Warehouse Group climbed 2.8 percent, extending Tuesday's 3.7 percent rally, after Australian supermarket operator Woolworths sold out its stake in New Zealand's biggest listed retailer for almost $NZ87.1 million to James Pascoe.
India's Sensex was moving up 0.6 percent after the RBI slashed repo rate by 25 bps to 7.5 percent with immediate effect, citing emergence of disinflationary trends in the economy and the fiscal consolidation measures announced in the Union Budget.
Elsewhere, Malaysia's KLSE Composite was up 0.2 percent, While Singapore's Straits Times index was marginally lower and Indonesia's Jakarta Composite index was down 0.3 percent.
On Wall Street, stocks declined overnight as top automakers reported disappointing sales and investors locked in some profits awaiting cues from the jobs report due later in the week. The Dow and the S&P 500 fell about half a percent each, while the tech-heavy Nasdaq slid 0.6 percent. Higher oil prices helped energy companies buck the downward trend.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.