Asian markets delivered a varied performance on Wednesday, influenced by encouraging U.S. economic data that tempered investors' expectations of imminent rate cuts by the Federal Reserve. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, emphasized on Tuesday the need for cautious policy-making, citing the inconsistent progress in reducing inflation.
Gold saw a slight increase during Asian trading as the dollar steadied ahead of the anticipated release of the Federal Reserve's December meeting minutes and employment data from ADP. Meanwhile, oil prices climbed for the second consecutive session due to tightened supplies from Russia and OPEC, following a significant crude draw reported by the American Petroleum Institute.
China's Shanghai Composite Index edged up slightly to 3,230.17 after a volatile session, spurred by regulatory plans to expand subsidies-eligible home appliance trade-ins. However, the Hang Seng Index in Hong Kong declined by 0.86% to 19,279.84, as the yuan reached its lowest point since September 2023, despite the central bank's efforts to support the currency. Tencent Holdings led the downturn with a 2.7% drop, continuing its previous losses.
In Japan, the stock markets fell over concerns about inflation and interest rates, with the yen nearing intervention-triggering levels, despite uncertainty surrounding BoJ rate hikes. The Nikkei dipped 0.26% to 39,981.06, and the broader Topix Index decreased by 0.59% to 2,770. Fast Retailing, the owner of Uniqlo, saw its share price decline by 0.5% ahead of its upcoming quarterly results, while chipmakers like Advantest and Tokyo Electron posted gains.
South Korea's Kospi Index ended 1.16% higher at 2,521.05, marking its fourth day of gains, aided by a 3.4% surge in Samsung Electronics following positive remarks from Nvidia CEO Jensen Huang on Samsung's capabilities in high-bandwidth memory chip design.
Australia's markets rose as core inflation rates dropped, strengthening the case for a potential interest rate cut by the Reserve Bank of Australia as early as next month. The S&P/ASX 200 Index increased by 0.77% to 8,349.10, extending its rally for the fifth straight day, while the All Ordinaries Index closed up 0.66% at 8,599.40, primarily driven by banks and consumer stocks. However, technology stocks followed their U.S. counterparts downward, with ZIP declining by 4.9% and Block by 3.3%.
In New Zealand, the S&P/NZX 50 Index saw a marginal rise to 13,043.11.
U.S. equities retreated overnight, with inflation and interest rate worries resurfacing after robust economic data. The Nasdaq Composite, a tech-heavy index, fell by 1.9%, the S&P 500 decreased by 1.1%, and the Dow dropped by 0.4%, as the yield on the ten-year Treasury note reached its highest point in eight months. The U.S. service sector saw accelerated growth in December, with input prices nearing a two-year peak and a surprise increase in job openings in November. Consequently, traders adjusted their forecasts regarding the timing of potential Federal Reserve interest rate cuts.
The material has been provided by InstaForex Company -
www.instaforex.com
