Asian Shares Mixed As Investors Await Powell's Comments
Asian stocks turned in a mixed performance on Wednesday after data showed U.S. inflation remained stubborn enough to thwart any Federal Reserve rate cuts soon.
Investors looked ahead to a report on U.S. producer inflation and this year’s final policy decision from the Federal Reserve later in the day for additional clues on the Fed’s rate trajectory.
While no change in interest rates is expected, Chair Jerome Powell’s press conference and the Fed’s dot plot of future policy trajectory accompanied by revisions to the summary of economic projections will be in the spotlight.
Market participants currently expect that the first Fed rate cut could come as early as May.
The dollar was slightly higher in Asian trading, denting demand for gold. Oil extended overnight losses to touch six-month lows on concerns over waning demand and oversupply.
Chinese shares fell sharply despite state media reporting that the government will step up policy adjustments to support an economic recovery in 2024.
The benchmark Shanghai Composite Index slumped 1.2 percent to 2,968.76 due to disappointment over the lack of fresh stimulus measures from Beijing at the Central Economic Work Conference to revive the housing market.
Hong Kong Kong’s Hang Seng Index dropped 0.9 percent to 16,228.75, dragged down by property stocks.
Japanese shares edged up slightly to extend gains for a third straight session on growing bets that the Bank of Japan will maintain its ultra-loose monetary policy until price increases are driven more by robust domestic demand and accompanied by stronger wage growth.
Investors also cheered surprisingly upbeat results in the Bank of Japan’s tankan survey of business sentiment.
The Nikkei 225 Index rose 0.3 percent to 32,926.35, while the broader Topix Index settled marginally higher at 2,354.92. Chip-related stocks such as Advantest and Tokyo Electron topped the gainers list.
Ushio jumped 12.3 percent after the maker of LED chips announced a tie-up with Applied Materials to develop technology for the advanced semiconductor packaging market.
Seoul stocks declined, with the Kospi falling 1.0 percent to 2,510.66 as investors awaited cues from the Fed meeting. Battery makers LG Energy Solution and Samsung SDI both fell 3-4 percent.
Australian markets rose modestly as gains among financials offset losses in the energy and gold mining sector. The benchmark S&P/ASX 200 Index rose 0.3 percent to 7,257.80, while the broader All Ordinaries Index gained 0.3 percent to close at 7,469.10.
Healthcare provider Sigma Pharmaceuticals soared 36 percent after it agreed to a merger with Chemist Warehouse Group.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.8 percent to 11,475.77.
U.S. stocks rose overnight to reach their best closing levels in well over a year as new data showed consumer price inflation continued to slow, in line with expectations.
The annual rate of growth eased to 3.1 percent in November from 3.2 percent in October, while core consumer price growth came in unchanged at 4.0 percent year-over year.
The Dow and the S&P 500 both gained about half a percent, while the tech-heavy Nasdaq Composite climbed 0.7 percent.
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