Asian stocks showed mixed results on Wednesday, following a downturn in U.S. markets on Tuesday, with investors awaiting key updates on U.S. consumer inflation later in the day.
U.S. futures remained mostly stable, while oil prices saw an uptick.
In Hong Kong, the Hang Seng Index dropped slightly by 0.1%, settling at 20,294.54. In contrast, the Shanghai Composite Index edged up by 0.2%, closing at 3,430.25. The rise came as Chinese leaders convened for an annual planning meeting in Beijing, where economic policies and growth targets for the upcoming year are expected to be outlined.
Earlier this week, top Chinese leaders agreed on a “moderately loose” monetary policy during a Politburo meeting, marking a significant shift from the cautious stance held for the past decade. While state media hinted at potential stimulus measures to boost the Chinese economy, analysts remained cautious about expecting substantial actions.
South Korea’s market saw a second consecutive day of gains, recovering from last week’s political uncertainty. The Kospi advanced by 0.7%, reaching 2,433.57, as the country’s jobless rate remained steady at 2.7% for November.
Meanwhile, Japan’s Nikkei 225 fell by 0.3% to 39,261.03, after data revealed that Japan’s wholesale inflation had risen by 3.7% year-on-year in November, continuing a three-month upward trend. This puts additional pressure on the Bank of Japan to consider raising interest rates during its policy meeting next week, with markets anticipating a rate hike from the current level of 0.25%.
Australia’s S&P/ASX 200 saw a slight decline of 0.4%, closing at 8,357.80.
On Tuesday, U.S. markets experienced modest losses, with the S&P 500 falling by 0.3% to 6,034.91, marking its first back-to-back losses in nearly a month. The Dow Jones Industrial Average also dropped 0.3% to 44,247.83, while the Nasdaq Composite slipped 0.3% to 19,687.24.
Investors are now looking ahead to Wednesday’s U.S. consumer inflation report and Thursday’s wholesale inflation update, which will provide key data ahead of the Federal Reserve’s meeting next week. Many investors anticipate a third interest rate cut this year, as the Fed has been easing rates from a two-decade high to alleviate pressure on the job market and control inflation.
The yield on the 10-year Treasury rose slightly to 4.22% from 4.20% late Monday.
Despite the Fed’s rate cuts, mortgage rates remain high, posing challenges for the housing market. This has led to a 6.9% drop in Toll Brothers’ stock, even though the luxury homebuilder reported stronger-than-expected earnings for the latest quarter.
In commodities, U.S. benchmark crude oil increased by 37 cents to $68.96 per barrel, while Brent crude rose by 40 cents to $72.59 per barrel. The U.S. dollar weakened slightly against the yen, falling to 151.48, while the euro remained steady at $1.0528.
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