In the volatile world of trading, Asian stocks took a hit as China’s economic concerns cast a shadow. The Nikkei plummeted by 1.6% following the Bank of Japan’s discussions on pivoting from negative interest rates.
Chinese markets were not faring any better, with the Shanghai Shenzhen CSI 300 index hitting a near five-year low, down 0.5%. Trade data for November painted a grim picture, revealing a trade surplus growth driven by a modest export recovery but overshadowed by a surprising dip in imports, showcasing local demand weakness.
Moody’s recent threat of a credit rating downgrade added to China’s woes, citing increased risks from a potential property market meltdown and a lack of clear policy support. The ripple effect extended to Hong Kong’s Hang Seng index, which tumbled 1.9% to a 13-month low.
Japan’s Nikkei’s slide was exacerbated by Bank of Japan Governor Kazuo Ueda’s remarks on facing a more challenging situation in December and January. Discussions about pulling interest rates from record lows fueled expectations of the BOJ ending its ultra-loose policies in 2024
While Japan faced challenges, broader Asian markets mirrored China’s weakness. The negative tone continued from Wall Street’s overnight close, amplifying regional concerns. Eyes were on the impending U.S. nonfarm payrolls reading, anticipated to offer insights into the future monetary policy path.
Amid the turbulence, Australia’s ASX 200 fell by 0.4% due to lower-than-expected trade surplus growth in October. South Korea’s KOSPI and Thailand’s SET Index also experienced losses of 0.1% and 0.7%, respectively.
Looking ahead, India’s Nifty 50 index hinted at a weak opening, cooling after three consecutive record-high closes. Attention turned to the Reserve Bank of India’s meeting, addressing recent stickiness in Indian inflation.
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