Asian Stocks Decline Amid Reduced Fed Rate Cut Expectations Following Strong Economic Data

Asian stock markets experienced a decline as traders reassessed their expectations regarding Federal Reserve interest rate cuts in light of positive economic data from the United States.

Focus on China as GDP Data Approaches

In particular, stocks in China are under the spotlight as the country prepares to release its gross domestic product (GDP) data. Analysts expect that the economic growth reported for the third quarter will reflect the slowest pace seen in six quarters, falling short of the country’s 5% growth target.

Performance of Australian and South Korean Markets

The Australian benchmark index, the S&P ASX 200, showed a decrease of 64 points, equivalent to 0.8%, settling at 8,290. Similarly, the South Korean Kospi index saw a dip of 6 points, or 0.18%, trading at 2,605.

China's Property Market Challenges

Chinese stocks faced a negative impact following another underwhelming policy briefing. On Thursday, the benchmark CSI 300 index slid by 1.13%. The country's property sector continued to struggle, with property stocks falling over 6% amid reports about an increase in 'White List' funding.

Japanese Market Reactions

Meanwhile, the Japanese Yen crossed the psychological threshold of 150 per dollar after the nation reported a 2.5% increase in headline inflation, matching estimates. This situation could lead to further interventions by the central bank given the current exchange rate.

Impact of US Retail Sales on Market Sentiment

In the United States, strong retail sales data for September influenced traders to lessen their expectations for Federal Reserve rate cuts this year. Sales figures exceeded forecasts, showing a 0.4% rise after a previous increase of 0.1% in August.

Rising Treasury Yields

As traders adjusted their outlook on rate cuts, US Treasury yields rose. The yield on 10-year Treasury bonds climbed by seven basis points, reaching 4.09%. Anticipations suggest that traders foresee less than a half-point reduction over the next two Federal Reserve meetings.

Mixed Closing for US Stock Markets

The US stock markets closed with mixed results. The Dow Jones Industrial Average and Nasdaq Composite rose by 0.37% and 0.04%, respectively, while the S&P 500 experienced a slight decrease of 0.02%.

Commodity Market Overview

On the commodity front, crude oil prices appeared set for increased volatility amidst escalating tensions in West Asia, particularly after Israel's recent actions involving Hamas leadership in Gaza. As a result, Brent crude was trading 0.23% higher at $74.62 per barrel, while West Texas Intermediate rose 0.25% to $70.85 per barrel.

Asia, Stocks, Economy