Asian stock markets experienced a mixed trading day as investors closely monitor developments surrounding a crucial policy briefing from China. On Friday, Chinese shares saw declines with the Shanghai Composite index falling by 1.6% to 3,249.14. Similarly, the CSI 300 Index, which comprises the top 300 stocks across the Shanghai and Shenzhen exchanges, dropped by 1.9%.
Over in Hong Kong, trading was halted for a public holiday, but sentiment remained cautious following a staggering drop of over 9% earlier this week—the sharpest decline since the global financial meltdown in 2008. The focal point for market watchers is set on an upcoming gathering by China’s Ministry of Finance, where new fiscal stimulus measures are anticipated to be unveiled. The earlier reported economic stimulus details from Beijing were underwhelming, leading many to hope that new measures would effectively stimulate the stalling property market and improve overall economic performance.
Meanwhile, in South Korea, the central bank has opted to reduce its benchmark interest rate by 25 basis points to 3.25%, marking a noticeable shift toward an easing monetary policy aimed at invigorating economic growth. This was the Bank of Korea’s first rate cut since 2020, prompted by a contraction in GDP during the previous quarter, alongside an inflation rate that fell below the central bank’s 2% target in September. Consequently, the Kospi index climbed 0.4% to close at 2,610.64.
In Australia, the S&P/ASX 200 saw a slight dip of 0.1%, settling at 8,218.40. On the other side of the globe, U.S. stock markets retreated from their record highs as inflation reports indicated higher-than-expected price increases. The S&P 500 fell 0.2% to 5,780.05, and the Dow Jones Industrial Average slid 0.1% to 42,454.12, following its previous day’s all-time high. The Nasdaq composite also fell marginally by 0.1% to 18,282.05.
The recent stock market rally was largely fueled by anticipations of easier monetary conditions, especially with the Federal Reserve’s adjusted focus on sustaining economic momentum rather than solely combating inflation. According to the consumer price index, inflation rate nuances are showing a slowdown to 2.4% in September from August’s 2.5%. However, economists had forecasted a sharper decline to 2.3%. Core inflation metrics, omitting the volatility of food and energy prices, also came in unexpectedly stronger.
Amidst these economic indicators, there were reports indicating that new unemployment claims rose to 258,000 last week, a figure relatively low by historical standards, yet it exceeded economists’ expectations. Factors such as Hurricane Helene and a worker strike at Boeing likely contributed to the uptick in applications.
In the bond market, Treasury yields demonstrated fluctuating behavior following the release of economic data, with the 10-year Treasury yield stabilizing at 4.07%, while the two-year yield decreased to 3.96% from 4.02%.
In terms of commodities, U.S. benchmark crude oil prices slightly decreased, trading at $75.66 per barrel, while Brent crude stood at $79.13. International currency exchanges saw the U.S. dollar rise to 148.69 Japanese yen, up from 148.51 yen, and the euro increased to $1.0942, from $1.0936.
This dynamic trading environment underlines the interconnected nature of global markets and highlights the continuous adjustments investors must make in response to evolving economic indicators and policy changes. As the situation unfolds, market participants remain vigilant, hoping for signs of recovery amid the fluctuations.