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Asia’s stock markets waver as investors eye China’s next move

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Asian stocks showed a mixed performance on Friday, as Chinese markets slipped amid investor anticipation of a key policy announcement concerning economic stimulus.

While US futures inched up, oil prices registered a decline.

Chinese equities saw a downturn during Friday’s trading session, with the Shanghai Composite Index dropping by 1.6%, settling at 3,249.14.

The CSI 300, which tracks leading companies listed in Shanghai and Shenzhen, followed suit with a 1.9% fall.

In Hong Kong, markets were closed due to a public holiday.

Earlier in the week, the index had recorded a sharp drop of over 9% on Tuesday, marking its worst decline since the global financial crisis of 2008.

The market’s focus remains on China’s Ministry of Finance, which is set to present a briefing on Saturday, where further details about long-awaited fiscal stimulus measures are expected.

Earlier announcements from Beijing this week left investors underwhelmed, as they were hoping for more substantial measures in line with policies introduced in late September to support the country’s struggling property market and economic growth.

Across the region, South Korea made headlines as its central bank cut the benchmark interest rate by 25 basis points, bringing it down to 3.25%.

This marks the Bank of Korea’s first rate cut since 2020, signaling a pivot toward an easing cycle to bolster economic growth.

The move follows a contraction in the country’s gross domestic product in the second quarter, as well as September’s inflation rate, which dipped below the bank’s 2% target.

In response, the Kospi index in Seoul posted a modest gain of 0.4%, rising to 2,610.64.

Meanwhile, Australia’s S&P/ASX 200 slipped slightly by 0.1%, ending the session at 8,218.40.

In the US, stocks pulled back on Thursday after hitting record highs, as inflation data came in slightly higher than anticipated, and jobless claims saw an unexpected increase.

The S&P 500 dipped 0.2% to close at 5,780.05, while the Dow Jones Industrial Average declined by 0.1% to 42,454.12.

The Nasdaq composite also edged lower by 0.1%, finishing at 18,282.05.

These losses followed a strong rally driven by optimism over the Federal Reserve’s rate cuts, as the central bank shifted its focus toward sustaining economic growth, rather than solely controlling inflation.

Inflation in September slowed to 2.4%, down from 2.5% in August, according to the consumer price index.

However, economists had projected an even sharper decrease to 2.3%.

Excluding volatile components like food and energy, core inflation trends were slightly hotter than anticipated.

In a separate report, 258,000 Americans filed for unemployment benefits last week.

Although historically low, the figure was higher than economists had forecasted.

Factors such as the impact of Hurricane Helene and a strike at Boeing may have contributed to the uptick in claims.

Bond markets reacted to the mixed economic data with fluctuations.

Yields on the 10-year Treasury note held steady at 4.07%, while the two-year Treasury yield, more reflective of Federal Reserve expectations, dipped to 3.96% from 4.02% on Wednesday.

On the commodities front, US benchmark crude oil prices dropped by 19 cents to $75.66 per barrel, while Brent crude, the global benchmark, declined by 27 cents, trading at $79.13 per barrel.

In currency markets, the US dollar rose to 148.69 yen from 148.51 yen, while the euro strengthened slightly to $1.0942, up from $1.0936 the previous day.

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