Phil Smith, deputy director of economics at S&P Global Market Intelligence, said Germany’s manufacturing rebound stalled in May, confirming PMI signals that growth driven by front-loaded orders may fade. New orders fell for the first time this year amid high uncertainty and surging prices, while manufacturing input-cost pressures continued to rise. Output price inflation was broadly unchanged from April as weak demand led some firms to be more cautious on pricing.

CHINA'S SHANGHAI COMPOSITE INDEX closed down 0.27%, the Shenzhen Composite Index fell 1.51%, the ChiNext Index dropped 2.15% and the STAR 50 Index slid 5% after A-shares reversed lower in the afternoon. Market turnover was 2.90 tln yuan, down 444.4 bln yuan versus the prior session. Coal miners outperformed, with several names hitting daily limits including Zhengzhou Coal & Power and Haohua Energy; Shanxi Coking Coal and China Coal Energy were among the top gainers. Software developers advanced, led by Yonyou Network and other midcaps with some stocks at limit-up. Semiconductor stocks tumbled, with multiple names off more than 10%. CPO-themed equities opened weak and fell further, several down over 10%.

Israeli Prime Minister Netanyahu said Hezbollah's headquarters in Beirut does not have immunity from strikes.