Asian Markets Were Varied on Uncertainty of Rate Cuts and US-China Trade
Asian stock markets exhibited varied performance on Thursday, Nov. 28, as investors traded prudently. The cautious sentiment was driven by the concern about losing another Fed rate cut. Data showed that the personal consumption expenditures (PCE) price index - the US primary inflation indicator - went up as expected. Elevated inflation indicators are highly correlated with higher interest rates.
The regional sentiment was further weakened by the prospect of a trade war between the US and China.
China's market indexes indicated this weak sentiment with the Shanghai Composite Index dipping 0.43% and Hong Kong’s Hang Seng index dropping 1.20%. Analysts predict further challenges for Chinese equities due to weak policy support and potential tariff hikes under incoming U.S. President Donald Trump.
However, the report said the US is considering looser-than-expected trade restrictions with China about chip equipment and AI memory semiconductors.
Responding to the report, Japanese stocks in semiconductor-related companies jumped, driving Japan's Nikkei 225 to close up 0.56%.
South Korea’s KOSPI index slightly rose 0.06% despite a surprise rate cut by the Bank of Korea, which reduced its benchmark rate by 25 basis points to 3%. The index was weighed down by a large decline in its tech sectors.