HONG KONG — Asian stock markets faced a downturn on Friday as Chinese indices fell ahead of a crucial briefing concerning an anticipated stimulus plan set for the weekend.
U.S. futures and oil prices also experienced declines.
Japan’s Nikkei 225 index rose by 0.6%, closing at 39,605.80, while Australia’s S&P/ASX 200 dipped 0.1% to finish at 8,214.50.
Chinese stocks saw significant losses, with the Shanghai Composite dropping 2.9% to 3,025.31 and the CSI 300 Index surrendering 3.2%.
Hong Kong’s markets were closed due to a public holiday; however, the city’s index had previously fallen over 9% on Tuesday, marking its steepest decline since the 2008 financial crisis.
Market participants are closely monitoring an upcoming announcement from China’s Finance Ministry set for Saturday, which is expected to reveal long-awaited fiscal stimulus initiatives.
This week, initial details about economic stimulus measures from Beijing fell short of market expectations. Investors had anticipated that these new fiscal strategies would follow earlier announcements aimed at revitalizing the sluggish property market and enhancing economic growth.
In South Korea, the central bank made waves by cutting its benchmark interest rate by 25 basis points to 3.25% on Friday, indicating a shift towards an easing cycle to promote economic growth. This marks the Bank of Korea’s first rate cut since 2020, prompted by a GDP contraction in the second quarter and a September inflation rate that dipped below the central bank’s target of 2%.
The Kospi index in Seoul witnessed a slight decrease, edging down 0.1% to 2,596.91.
On Thursday, U.S. stocks took a step back from record highs following reports indicating higher-than-expected inflation levels last month and an increase in unemployment benefit claims.
The S&P 500 declined 0.2% to 5,780.05, the Dow Jones Industrial Average fell 0.1% to 42,454.12 after reaching an all-time high the previous day, while the Nasdaq composite also dipped 0.1% to 18,282.05.
The recent surge in stock prices was largely attributed to investor optimism around easing interest rates, as the Federal Reserve shifts its focus towards sustaining economic growth rather than primarily combating inflation.
Inflation rates slowed to 2.4% in September, down from 2.5% in August, although economists had forecasted a decline to 2.3%. Additionally, core inflation trends, which exclude volatile food and energy prices, revealed slightly higher than anticipated rates.
A separate report indicated that 258,000 U.S. workers filed for unemployment benefits last week, a number that, while historically low, represented a sharper-than-expected rise. External factors such as Hurricane Helene and a strike at Boeing may have played a role in this increase.
In the bond market, Treasury yields fluctuated following the release of economic data, with the yield on the 10-year Treasury holding steady at 4.07%, while the two-year Treasury yield decreased to 3.96% from 4.02%.
In commodity markets, U.S. benchmark crude oil fell by 92 cents to $74.93 per barrel, with Brent crude declining by $1.04 to $78.36 per barrel.
The dollar strengthened against the Japanese yen, rising to 148.68 from 148.51, while the euro also saw a slight increase, costing $1.0937, up from $1.0936.
