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Asian Equities Traded in the US as American Depositary Receipts Fall Sharply in Tuesday Trading

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Asian equities traded in the US as American depositary receipts were trending sharply lower Tuesday morning, falling 0.95% to 2,830.82 on the S&P Asia 50 ADR Index.

From North Asia, the gainers were led by education company 17 Education & Technology Group (YQ) and real estate management and digital security firm Eason Technology (DXF), which surged 11% and 9.6%, respectively. They were followed by healthcare platform 111 (YI) and casino and resort operator Melco Resorts & Entertainment (MLCO), which advanced 4% and 3.2%, respectively.

The decliners from North Asia were led by game live-streaming service HUYA (HUYA) and semiconductor company Himax Technologies (HIMX), which dropped 7.5% and 7%, respectively. They were followed by utilities company Korea Electric Power (KEP) and tech company Xunlei (XNET), which lost 5.1% and 4.8%, respectively.

From South Asia, the only gainers were fintech firm Trident Digital Tech (TDTH) and tech conglomerate Sea (SE), which rose 12% and 11%, respectively.

The decliners from South Asia were led by pharmaceutical company Dr. Reddy's Laboratories (RDY) and IT firm Wipro (WIT), which fell 5.6% and 2.3%, respectively. They were followed by computer hardware maker Canaan (CAN) and IT firm Infosys (INFY), which were down 2.2% and 2%, respectively.

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Asia Markets

Swiss Market Index Closes Higher; SoftwareOne Shares Jump

Swiss stocks were in positive territory on Tuesday, with the Swiss Market Index up 0.14% at the end of the trading day, amid a slew of economic data and corporate earnings releases that hit the market.Switzerland's producer and import price index rose 0.8% month over month in April and fell 2% on a yearly basis to 100.5 points, according to data from the Federal Statistical Office.In the euro area, the ZEW Indicator of Economic Sentiment for the bloc improved to -9.1 points in May from -20.4 points in April. Across the pond, the annual inflation rate in the US climbed to 3.8% in April from 3.3% a month earlier, while the annual core inflation rate rose to 2.8% from 2.6% previously.On the corporate front, SoftwareOne (SWON.SW) shares closed the session 9.30% higher as it booked a year-over-year surge in first-quarter revenue to 387.7 million francs from 231.6 million francs, with the integration of acquired company Crayon progressing as planned. Looking ahead, the Swiss software and cloud technology group raised its revenue growth guidance for 2026 to the mid- to high-single digits from the mid-single digits, at constant currency and on a combined like-for-like basis.Laboratory instruments company Tecan Group (TECN.SW) and real estate group PSP Swiss Property (PSPN.SW) also published financial updates.Meanwhile, Deutsche Bank Research reduced its price target for Alcon (ALC.SW) to 70 francs from 77 francs, with a buy rating on the stock, noting that the investment case for the Swiss eye care products group is still intact after "solid" first-quarter results. The stock was 2.89% in the green at closing."Although the top line did not meet buy-side expectations, the performance should be sufficient to deliver on full-year guidance ... The company also initiated a new $1.5 billion share buyback program, and its many recent product launches are ramping up well, set to contribute more meaningfully in the coming quarters. Consequently, we view the harsh share price reaction following the results as overdone," the research firm said. "While it may take some time for market sentiment to settle, we expect the stock to recover, and our reduced target price still offers 40% upside potential."

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Asia Markets

DAX Index Blinks Red as German Inflation Accelerates

German equities were downbeat on Tuesday, with the blue-chip DAX index ending the trading session 1.62% in the red, as the market assessed fresh inflation data and the economic sentiment survey from the eurozone's biggest economy against the tenuous Iran war ceasefire.Final data from Destatis confirmed that the annual inflation rate in Germany climbed to 2.9% in April from 2.7% in March. The annual core inflation rate, which excludes food and energy prices, eased to 2.3% from 2.5%."Overall inflation increased for the second consecutive month as a result of another rise in energy prices that was due to the Iran war. Consumers are particularly feeling the persistent price pressure regarding motor fuels," Federal Statistical Office President Ruth Brand said.Meanwhile, the ZEW economic sentiment indicator for Germany rose to -10.2 points in May from April's -17.2 points, beating the consensus forecast of -19.2 points. However, the current situation index fell by 4.1 points to -77.8 points, against the expected -77.5 points. ZEW President Achim Wambach said there is "cautious hope" for a possible recovery in the latter half of 2026, contingent on a de-escalation in the Middle East and a positive impact from the government's economic stimulus efforts.On the geopolitical front, US President Donald Trump described the ceasefire with Iran as "on life support" after rejecting Tehran's counteroffer. Against this backdrop, Danske Bank said Brent crude remained on an upward trajectory, trading at around $105 per barrel on Tuesday morning.Amid a busy session for corporate earnings and trading updates, Bayer (BAYN.F) was the top blue-chip stock, gaining 3.67%, after reiterating its full-year 2026 currency-adjusted outlook following a strong first quarter, during which net income more than doubled to 2.76 billion euros from 1.30 billion euros a year earlier.Meanwhile, Munich Re (MUV2.F) shed 6.09%, dropping to the bottom of the DAX index, as investors focused on the reinsurer's planned volume reductions during the April renewals amid softer pricing, overshadowing its solid first-quarter results."Munich Re is doubtless showing discipline on price to preserve margins and current returns are strong but consensus FY top-line expectations on first view look too high. Key questions are whether EUR64bn FY Reinsurance revenue target, unchanged today, is achievable vs EUR60bn Q1 run-rate, with consensus already below at EUR62.4bn, and the degree to which [property-casualty reinsurance and global specialty insurance] margins can be maintained into 2027 and beyond," RBC Capital Markets wrote in a quick-take note.

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Asia Markets

UK Shares Flat Amid Growing Political Uncertainty; Intertek Shines

British equities were little changed on Tuesday, with the FTSE 100 down 0.04% at closing, as political uncertainty surrounding Prime Minister Keir Starmer and fresh signs of weakness in the retail sector weighed on sentiment.Four ministers have resigned from the government, adding to concerns over instability within the Labour administration and fueling speculation about Starmer's leadership."A growing rebellion against UK Prime Minister Keir Starmer staying on as Prime Minister could force him to resign and generate significant policy uncertainty. A ballot of grassroots Labour party members would decide his replacement, risking a leftward pivot in policy and a lesser commitment to fiscal consolidation. This would likely put downward pressure on UK asset prices in the near term," Berenberg Senior UK Economist Andrew Wishart said.Across the UK's retail sector, sales dropped 3.4% year over year on a like-for-like basis in April 2026, against the 3.1% rise in the previous month, according to data from the British Retail Consortium. The reading, which missed market expectations of a 0.8% increase, marked the first fall in retail activity since November 2024."April's sales fall was largely driven by the Easter shift, with food hit hardest. But weak consumer confidence also played a role as fears about the Middle East conflict driving up living costs led shoppers to rein in. Big-ticket purchases fell, with the recent recovery in furniture losing steam, and uncertainty around summer holidays hitting discretionary spend. With the World Cup coming, retailers hope it will provide a lift, and early signs show demand for TVs and sound systems picking up," BRC Senior Analyst Ian Bendelow said.In corporate news, telecommunications company Vodafone (VOD.L) said its loss attributable to owners of the parent for the 12 months ended March 31 shrank to 397 million euros from 4.17 billion euros year over year amid an increase in revenue. Vodafone was down 7.02%, becoming the blue-chip index's worst performer.On the upside, Intertek Group (ITRK.L) was the top stock, rising 6.43%, after receiving a fourth and final proposal from Swedish private equity giant EQT of 60 pounds sterling per share in cash plus Intertek's planned 2025 final dividend of up to 1.077 pounds per share. The British assurance, testing, and certification company's board rejected EQT's previous offer of 58 pounds per share in cash."ITRK's shares have not been above GBP60 since Q221 and have materially lagged key benchmarks and peers until recently," RBC Capital Markets said. "We see EQT's bid as a fair balance between compensating ITRK shareholders for future upside potential (whilst there is no guarantee that the current Board can deliver seamless upside), and creating a cushion of safety for EQT as it likely plans to prepare ITRK for the next stage on it strategic journey."

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