Asian Markets Slipped on Concerns Over the US Rate Outlook and China's Disinflation

 

Asian markets broadly declined on Thursday (Jan. 9). The sentiment was weighed on by the outlook of reduced US interest rate cuts and underwhelming inflation data from China.

 

China's market lost, with the Shanghai Composite Index dipping 0.58% and Hong Kong's Heng Seng index dropping 0.20%, due to static inflation data revealed on Thursday. December’s consumer price index (CPI) was nearly flat, while producer prices contracted for the 27th consecutive month. They both signaled persistent deflationary pressure despite Beijing's aggressive stimulus measures. Lingering worries over weak consumer demand and a prolonged property market slump further dampened sentiment.

 

Japan’s Nikkei 225 index declined 0.94% after stronger-than-expected wage data fueled speculation of higher inflationary pressures. Rising average cash earnings in November raised fears that stronger consumer spending could prompt the Bank of Japan (BOJ) to increase interest rates. The yen strengthened following the data, pressuring export-driven stocks. The BOJ hinted that the next potential rate hike decision would come after the March wage discussion.

 

India’s Nifty 50 index started the day softly amid lackluster corporate earnings. As of 04: 48 pm SGT., it slid 0.61%.

 

As the outliner, South Korea’s KOSPI climbed 0.034% against the trend, extending its recovery despite lingering concerns about political uncertainties.

 

Elsewhere, as of 04: 33 pm SGT., Singapore’s Straits Times Index shed 0.84%. FTSE Bursa Malaysia KLCI fell 0.81%.