Asian markets, led by China, decline as investors await Fed rate decision

 Asian markets, led by China, decline as investors await Fed rate decision

Asian markets, led by China, decline as investors await Fed rate decision

Asian markets experienced a mixed day on Wednesday, with Chinese stocks leading the declines as investors digested Beijing’s economic plans and awaited the U.S. Federal Reserve’s interest rate decision.

China’s CSI 300 index tumbled 1.67%, closing at a fresh four-year low of 3,369.6. This drop came despite Beijing’s pledge on Tuesday to boost domestic demand, prioritize strategic sectors, and tackle the real estate crisis. Analysts at BofA Global Research noted that the measures were largely in line with expectations and didn’t amount to a significant policy shift.

Japan’s Nikkei 225 bucked the trend, advancing 0.25% to close at 32,926.35, while the Topix remained unchanged. The Bank of Japan’s Tankan survey, which measures economic conditions in Japan, showed business confidence at big manufacturers improving more than expected in the fourth quarter. The index for big non-manufacturers sentiment also rose for the seventh consecutive quarter.

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Australia’s S&P/ASX 200 defied gravity, climbing 0.31% to close at a four-month high of 7,257.8. South Korea’s Kospi, however, fell 0.97% to close at 2,510.66, and Hong Kong’s Hang Seng index shed 0.94%.

Overnight in the U.S., all three major indexes continued their four-day rally, fueled by in-line inflation data. The consumer price index rose 3.1% year-on-year, in line with expectations. The tech-heavy Nasdaq Composite and Dow Jones Industrial Average both reached their highest intraday levels since April and January of last year, respectively. The S&P 500 gained 0.46%.

The focus now shifts to the Federal Reserve’s policy statement later today, with investors eagerly awaiting any hints about future interest rate hikes. A CNBC survey found that most economists expect the central bank to begin cutting rates in mid-2024 and are cautiously optimistic about a soft landing for the economy.

Elsewhere in the world, Argentina devalued its currency by 56% and slashed subsidies in an attempt to address its economic crisis. The peso now trades at 800 pesos to the dollar, significantly weaker than the previous rate of 366.5.

In conclusion, global markets reacted to a mixed bag of news today. While Chinese stocks fell on concerns about Beijing’s economic plans, the U.S. markets continued their upward climb. The Fed’s decision later today will be crucial in determining the direction of the markets in the coming weeks.

Web Desk

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