Adding to the pressure, a batch of weaker-than-expected Chinese data weighed on the market. April industrial production and retail sales growth in China — Australia’s largest trading partner — slowed to multi‑year lows, likely reflecting reduced fiscal support.

Losses were broad-based across the local market, with most sectors finishing lower. Transport, non‑energy minerals, consumer-related stocks, and process industries led the declines. Brambles Ltd. dropped about 19% after the logistics group cut its full‑year profit growth outlook, blaming repair‑capacity constraints among its U.S. subcontractors. Other notable laggards included BHP Group, Macquarie Group, and Evolution Mining.

Investors are now looking ahead to key domestic data and policy signals, including Australia’s flash May PMI, the Reserve Bank of Australia’s meeting minutes, and April labor market figures due later this week.

Investors are also awaiting Italian trade balance data and Turkish consumer confidence figures for additional economic signals. In corporate news, Ryanair CFO Neil Sorahan said the airline has prepared for an “armageddon situation” in response to the worsening jet fuel crisis. In premarket trading, Euro Stoxx 50 futures were down 1%, while Stoxx 600 futures declined 0.6%.

Sentiment was further pressured by fresh domestic data showing New Zealand’s private sector remained in contraction. The services sector shrank for a third consecutive month, albeit at a slower pace, while manufacturing expanded at its weakest rate in seven months. Disappointing Chinese economic figures added to the cautious mood, with investors also looking ahead to the PBOC’s interest rate decision later this week.

Losses were broad-based, with nearly all sectors in negative territory, led by consumer staples, followed by consumer discretionary and information technology. Among the notable decliners were A2 Milk (-5.1%), Mainfreight (-4.3%), Ebos Group (-3.4%), Freightways Group (-3.0%), Auckland International Airport (-1.6%), Fisher & Paykel Healthcare (-1.4%), and Infratil (-0.9%).

Gains were led by Samsung Electronics (+4.6%), SK Hynix (+1.0%), Samsung Electro-Mechanics (+4.9%), and Doosan Enerbility (+1.2%), while Hyundai Motor (-4.7%), LG Energy Solution (-3.4%), and HD Hyundai Heavy Industries (-3.6%) underperformed. The volatile session underscored persistent sensitivity to global growth prospects and interest rate expectations, with foreign selling and sector rotation limiting further upside. Labor-related uncertainty at Samsung remains a drag on sentiment toward the semiconductor sector.

The broader market touched its lowest level since May 5, dragged down mainly by losses in electronic technology, financials, technology services, and health technology shares. The electronic technology sector slipped 0.8%, with Taiwan Semiconductor Manufacturing Company (TSMC) — which represents more than 40% of the market’s total capitalization — losing 1.6%, and Delta Electronics tumbling 3.4%.

Sentiment was further pressured by a series of weak economic data out of China, as markets looked ahead to the People’s Bank of China’s interest rate decision on Tuesday. Other notable decliners included ASE Technology Holding (-7.0%), Unimicron Technology (-2.2%), and Accton Technology (-1.1%).

Domestically, sentiment remained cautious ahead of first-quarter current account data due later this week, following a shift to deficit in the fourth quarter driven by a wider oil trade gap. President Prabowo sought to play down the impact of the currency’s depreciation on rural communities, arguing that villagers are largely insulated because they do not transact in U.S. dollars.

Attention is now turning to Bank Indonesia’s upcoming policy meeting, where some analysts are urging a rate hike to curb capital outflows and support the rupiah. Prabowo has recently criticized Governor Perry Warjiyo over the currency’s slump, even as he signed off on tighter foreign-exchange regulations and liquidity measures.

Indonesian assets were already under pressure before the outbreak of the Iran conflict, amid investor unease over the country’s fiscal outlook, inflation risks, and concerns about market transparency.

Selling intensified as the rupee weakened toward record lows, heightening worries about imported inflation and potential foreign capital outflows. On the downside, Tata Steel dropped about 4% after its fourth-quarter profit missed expectations, hurt by higher raw material costs and a one-off restructuring charge at its Netherlands operations. Other notable decliners included Amber (-9.4%), Cochin Shipyard (-6.7%), and Himadri Speciality Chemical (-4.7%). In contrast, Gland Pharma jumped 12.4% after posting a 97% year-on-year increase in net profit for the March quarter.

Gains were limited, however, by soft export demand. AmSpec Agri Malaysia reported that shipments in the first half of May were down 16.5% month-on-month. Concerns over demand persisted after April activity data in China, a key buyer, pointed to slowing momentum. In India, the world’s largest consumer, palm oil imports fell 26% in April from March to a four-month low, weighed by weaker institutional buying and a reduced discount to rival vegetable oils.

Separately, Malaysia lowered its June crude palm oil reference price but kept the export duty unchanged at 10%.

Some easing of those constraints may come from additional output expected later this year, including the planned restart of Boliden’s Tara mine, the ramp-up of Ivanhoe’s Kipushi project, and the resumption of production at Garpenberg in the second quarter. On the demand side, firmer industrial activity in China is lending support, but persistent geopolitical uncertainty in the Middle East continues to cloud the broader outlook.

In the latest geopolitical developments, President Donald Trump cautioned that Tehran is “running out of time” to reach an agreement with Washington, while Iranian media reported that negotiations remain deadlocked. The prospect of higher interest rates is heightening concerns about global economic growth and manufacturing activity, adding further pressure on demand for industrial metals.

Market sentiment was additionally undermined by fresh signs of weakness in China’s economy. Both retail sales and industrial production came in below forecasts, and fixed asset investment unexpectedly contracted, deepening worries about the demand outlook in the world’s largest copper consumer.

Risk sentiment deteriorated further following reports of an attack on a nuclear facility in the UAE and expectations that US President Trump could weigh military options against Iran. Market participants anticipate the rupee will stay under pressure, with the Reserve Bank of India expected to prioritize smoothing excessive volatility rather than defending any specific exchange-rate level.

Separately, investors also digested data showing India’s unemployment rate rising to 5.2% in April 2026 from 5.1% previously, the highest since October. Elevated energy costs and disruptions to shipping lanes in the Persian Gulf have eroded purchasing power, adding to headwinds for the domestic economy.

The pledge is viewed as supportive for corn futures, as these purchases would come on top of an existing soybean agreement and could potentially expand to other agricultural commodities. USDA data indicate that a renewed flow of Chinese corn imports would mark a clear shift from nearly two years of muted buying.

At the same time, producers remain wary as recent surges in fuel and fertilizer costs—driven in part by ongoing geopolitical unrest in the Middle East—continue to shape crop production economics and influence overall pricing dynamics.

The increase in the 5-year auction yield suggests investors are demanding higher compensation to hold medium-term Japanese debt, reflecting a shifting rate environment and changing market expectations around Japan’s future interest-rate path and inflation dynamics. The move from 1.826% to 2.024% marks a notable step-up in funding costs for the government and may influence pricing across the broader JGB curve.

Market participants will now be watching subsequent auctions and policy signals closely to assess whether this rise marks a sustained repricing of Japanese rates or a shorter-term adjustment driven by auction-specific factors and positioning in the JGB market.

The latest data, updated on 18 May 2026, indicate that offshore investors now account for a slightly larger proportion of the RBNZ’s holdings than a month earlier. While the move from 56.70% to 57.10% is modest, it underscores an ongoing presence of foreign capital in New Zealand’s financial markets and will be closely watched by market participants tracking shifts in international investor appetite for New Zealand assets.

On the external front, both exports (12.6% vs. 5.6%) and imports (21.1% vs. 9.5%) accelerated markedly. In contrast, private consumption growth edged down slightly to 3.2% from 3.3%.

By sector, non-agricultural output picked up to 3.0% from 2.7% in Q4, supported by expansions in the industrial sector (1.8%) and services (3.6%), with mining, quarrying, and construction providing key contributions. Agricultural output also strengthened, rising 1.2% compared with 0.6% previously, mainly on the back of higher production of sugarcane, rubber, oil palm, maize, fruit, and broilers.