Asian stock markets displayed varied results in a cautious trading session on Wednesday, as investors awaited the Federal Reserve's meeting later in the day. A 25-basis point rate cut is anticipated, and the release of the Summary of Economic Projections, along with Fed Chair Jerome Powell's press conference, could indicate possible shifts in the scale and trajectory of future rate reductions.
Market analysts predict a hawkish adjustment in the Fed's dot plot, aligning with changes in market expectations since the last update in September.
During Asian trading, the U.S. dollar remained stable against major currencies, gold experienced little movement, and oil prices showed mixed trends following a two-day decline, with industry reports revealing a significant reduction in U.S. commercial crude inventories.
China's Shanghai Composite Index increased by 0.62% to 3,382.21 amidst reports of a planned record budget deficit for 2025 and directives from the State-owned Assets Supervision and Administration Commission (SASAC) urging state-owned enterprises to enhance market value management of listed companies.
Hong Kong's Hang Seng Index climbed 0.83%, closing at 19,864.55, fueled by optimism that Chinese stimulus measures would boost consumer spending.
In contrast, Japanese markets declined significantly, anticipating Thursday's Bank of Japan interest-rate decision. The central bank is expected to maintain its benchmark interest rate, pending greater clarity on domestic wage and spending trends, as well as potential policy shifts by U.S. President-elect Donald Trump. The Nikkei average fell by 0.72% to 39,081.71, while the broader Topix index decreased by 0.31% to 2,719.87.
Auto sector stocks surged on news of a potential Nissan-Honda collaboration. Nissan Motor shares skyrocketed 23.7%, while Honda Motor decreased by over 3%. Toyota Motor saw an increase of over 2%, and Mitsubishi Motors surged by 19.7%.
In Seoul, the Kospi average rallied 1.12% to 2,484.43, with large-cap stocks gaining momentum. Hyundai Motor surged by 4.8%, and Samsung Electronics increased by 1.3%.
Australian markets concluded the day mostly unchanged after a volatile session. Gains in healthcare stocks partially offset losses in energy stocks and gold miners. Insignia Financial dropped 4.2% after rejecting Bain Capital's A$2.67 billion ($1.69 billion) takeover proposal.
Meanwhile, across the Tasman, New Zealand's benchmark S&P/NZX-50 index fell by 0.38%, closing at 12,865.55. Investors largely overlooked the results of a survey indicating an improvement in New Zealand's consumer confidence, which reached its highest level in three years during the fourth quarter.
In the United States, stock markets ended lower overnight as data revealed stronger-than-expected retail sales growth in November, intensifying the debate on the Federal Reserve's policy direction for 2025. The Dow dropped 0.6%, marking its ninth consecutive session of decline and its longest losing streak since 1978. The Nasdaq Composite, heavily weighted toward technology stocks, fell by 0.3%, and the S&P 500 decreased by 0.4%.
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