China's stocks drop due to economic concern

China's shares dropped for the first time in three days prior to the release of data this week, due to concerns the nation is failing to sustain growth momentum. China's foreign reserves, trade and inflation figures are set to be announced in the coming days, with investors being cautious regarding the results. The report due on Tuesday is predicted by Bloomberg to reveal that China’s foreign-exchange reserves fell to $3.2tn in May from $3.22tn in the month prior; overseas shipments are likely to have dropped 4.2%, compared with a 1.8% decline in April, according to another survey; and figures last week revealed an official factory index stood at 50.1, around the line between expansion and contraction, while a non-manufacturing gauge dropped from the previous month.

Investors will be on data-watch in the first week of June, searching for clues on China's economy and awaiting central bank decisions from Australia, India, South Korea and New Zealand.

China May trade data are due on Wednesday, and Deutsche Bank's Taimur Baig said in a note that China's trade surplus was likely to widen to $60 billion in May from $45.6 billion in April.



"Import costs are falling as high global commodity supply keeps prices low, even though volumes of iron ore, crude oil, copper and other commodities are growing. Exports are still lower in year-on-year terms, but there are signs of recovery," said economists at Moody's Analytics in a weekly note.

On Thursday, China will release consumer price data for May. Consumer prices have nudged higher in recent months due to an increase in food prices, while there are also indications that non-food inflation is on the rise, Moody's Analytics said.

China's May producer price index (PPI), an index of prices measures at the producer level, will be released on the same day, and is likely to show shift away from deflation due to the rebound in commodity prices.

Beijing will also be releasing its May industrial production, fixed asset investment and retail sales on Sunday.