Asian Stocks Rise as Focus on Fed, China Inflation Fears Weighs By Investing.com

Investing.com — Most Asian stocks rose on Monday, albeit marginally, as investors retreated ahead of a series of key central bank meetings this week, while Chinese stocks fell on continued signs of easing inflation in the country.

Regional markets received positive signals from Wall Street, after US stock indices rose on Friday following a stronger-than-expected performance. The reading indicated some resilience in the world’s largest economy, although it also saw traders pricing in fewer chances of early interest rate cuts by the Federal Reserve.

It was flat on Monday.

The Japanese index was the best performer among its peers, rising by 1.6% as it recovered from the sharp losses witnessed last week. Tightening signals from the Bank of Japan have weighed on local stocks, although the prospect of relatively loose monetary conditions in Japan still keeps investors optimistic about local stocks.

Broader Asian markets were slightly higher, although concerns about China and caution ahead of this week’s meeting kept gains limited. While the central bank is widely expected to keep interest rates unchanged, its forecast for 2024, especially when it plans to start cutting interest rates, will be closely watched.

Australia’s index rose 0.2%, while South Korea’s index added 0.1%. Aside from the Fed, interest rate decisions from the Fed are also available.

Chinese stocks fall to their lowest levels in 4 years as inflation continues to decline

China’s blue-chip stock index fell 1.3% to its weakest level since early 2019, while the Hong Kong and Hong Kong stock indexes also recorded similar declines.

Data released over the weekend showed that China fell at its fastest pace in three years in November, while falling for the 14th straight month.

The readings showed that Chinese spending did not rise despite continued liquidity measures from Beijing – a trend that bodes poorly for Asia’s largest economy. China has now been experiencing falling inflation for two consecutive months, which heralds a slight rebound in economic activity in the coming months.

The inflation data also came on the heels of several mixed economic readings for November, and attracted growing calls from investors for more stimulus measures from Beijing.

Chinese stocks were the worst-performing stock exchanges in Asia this year, amid continued negativity about the economy.

Indian stocks are preparing to retreat from record levels

Indian index futures pointed to a marginally weak open on Monday, with investors poised to book more profits after the index posted a series of record highs last week.

Recent gains in Indian stocks have seen it cross $4 trillion in overall valuation, mainly driven by optimism about the world’s fastest growing major economy.

A decisive key state election win for the ruling Bharatiya Janata Party, which sets it up for a strong performance in the 2024 general elections, has also added to optimism about Indian markets.

The focus this week is now on the key, after the Reserve Bank warned that inflation could rise during November.

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