Nikkei Stock Exchange
Nikkei Stock Exchange Yuriko Nakao/Reuters

Asian stock markets face the week with sentiment leaning negative as economic news, particularly from China, is likely to disappoint investors.

Central banks' announcements last week of rate cuts to stimulate the global economy failed to calm market jitters and raised concerns among investors that the actions reflect a pessimistic outlook of policymakers on their economies.

Sluggish U.S. jobs growth in June added to fears of global economic decline. The U.S. Labor Department reported that only 80,000 jobs were added in June, slightly better than 77,000 jobs created in May but falling short of Thomson Reuters' estimate of 90,000 job gains, while the unemployment rate remained stuck at 8.2 percent. Only 225,000 jobs were added in the last three months, the weakest quarterly job growth since 2010, raising fears that economic recovery in the world's largest economy was losing steam.

Investors are likely to be extremely cautious ahead of the slew of economic data from China as the People's Bank of China, in a surprising move Thursday, cut interest rates for a second time this year. The unexpected move hints at an uncertain economic growth in the world's second-largest economy and raises speculation that coming economic data could be weak.

The Chinese government is to release inflation and trade data Monday and Tuesday respectively. Inflation is expected to fall below 3 percent for the first time in three years, giving room for further easing.

The main event, the second-quarter economic activity data, is to be released Friday along with retail and industrial production figures. The GDP data are expected to show that the world's largest emerging economy grew at the slowest pace in three years in the second quarter.

We forecast Q2 GDP at 7.4 percent for China, which will be the slowest since Q109. Retail sales and investment are likely to have slowed in June. The size of new bank loans in June is also closely watched, with any sign of moderation seen as the trigger for further RRR cuts. Indeed, we believe RRR cuts are needed to stimulate growth via bank lending, said a note from Credit Agricole.

In Japan, machinery orders and Current Account Balance for the month of May are due for release during the week. The current account surplus is expected to narrow to 244 billion yen from 288.6 billion yen in April and machinery orders are expected to decline by 4.5 percent on monthly basis after reporting a strong increase of 5.7 percent in April.

Meanwhile, the Bank of Japan is likely to keep monetary settings unchanged at its policy meeting Thursday, as it recently upgraded the assessment for all nine regional economies for the first time in nearly three years.

India will kick off earnings season next week with TCS and Infosys due to release their April-June quarterly earnings Thursday, while the government will release industrial production data the same day.