Title: “Trading Trends in Asia: A Look at Friday’s Stock Market Performance”
Asian stocks largely experienced a subdued performance on Friday, with most indices recording minor losses or remaining relatively flat due to the potential deceleration of interest rate cuts in the US. The market’s conservative approach was in response to the possibility of a slower decline in US interest rates, which has reduced the appetite for riskier assets.
Japan’s stock market, however, played against this trend. Despite the announcement of higher-than-predicted consumer inflation data, the Japanese markets recorded a slight uptick. This data hints at potential future interest rate increases from the Bank of Japan (BOJ). Nevertheless, the BOJ indicated on Thursday that any rate increases are more likely to occur later rather than sooner.
The Asian markets’ lukewarm performance was influenced by the US stock market’s flat close the previous night. American stocks fell from their record peak after the Federal Reserve indicated a slower rate of interest cuts for 2025. Meanwhile, Wall Street futures remained muted during Asian trading hours.
In Japan, both the Nikkei and Topix indices rose by approximately 0.2%, outperforming their regional counterparts. Both indices are projected to drop by 1% to 1.4% this week. The country’s stronger-than-anticipated inflation data for November further strengthens the argument for potential interest rate rises by the BOJ.
Meanwhile, Chinese indices, including the Shanghai Composite and Shenzhen Component, recorded slight gains on Friday. These indices were the week’s top performers in Asia, incurring fewer losses than their regional counterparts. Optimism surrounding Beijing’s potential increase in fiscal spending to stimulate economic growth in 2025 helped limit the losses in the Chinese markets.
In contrast, the broader Asian market fell back on Friday, impacted by the Federal Reserve’s hawkish stance. Higher US rates have lessened the attractiveness of risk-based assets. Australia’s ASX 200 index fell by 1.3%, largely influenced by a 3.7% drop in Wesfarmers Ltd after the conglomerate announced its plan to sell its industrial gas supply branch to a subsidiary of Japan’s Taiyo Nippon Sanso Corp.
Uncertainty surrounding political stability in South Korea led to a 1.3% decrease in the country’s KOSPI index, making it the week’s worst-performing Asian market with a 3.5% decline. Additionally, sharp losses in local chip manufacturing companies also contributed to the market downturn. Indian markets, as indicated by the Nifty 50 index, are also expected to open weakly after a 2.3% drop this week.
