Overview
Chinese stocks led the declines across Asia-Pacific markets on Friday, influenced by overnight losses on Wall Street as investors grappled with persistent inflation data from the U.S. The CSI 300 blue-chip index in mainland China fell by 2.77% to close at 3,887.17, marking a weekly decline of 3.25%. This drop signifies a loss of momentum for the previously stimulus-driven rally.
Anticipated Policy Briefing
The upcoming press conference by China’s Ministry of Finance, scheduled for Saturday at 10 a.m. local time, is highly anticipated among investors. The session is expected to announce a new fiscal stimulus package aimed at bolstering the Chinese economy. However, as the markets will be closed on Saturday, investors are left awaiting guidance on potential measures to support growth.
Bank of Korea Rate Decision
In regional developments, the Bank of Korea (BOK) decided to cut its benchmark interest rate by 25 basis points to 3.25%, marking the first rate cut since 2020. This decision signals the conclusion of a tightening cycle that saw rates reach a 15-year high in 2023. The rate reduction comes as inflation in South Korea eased to 1.6% in September, the lowest level since early 2021, and below the central bank’s medium-term target of 2%.
Market Movements
Oil Prices: Oil prices retreated after a significant rise of over 3% on Thursday. Brent futures fell 0.35% to $79.11 a barrel, while West Texas Intermediate crude dropped 0.34% to $75.60 a barrel. This decline follows increased fuel consumption ahead of Hurricane Milton and rising concerns about escalating conflicts in the Middle East affecting Iranian oil facilities.
Japan: Japan’s Nikkei 225 index managed a slight gain, increasing by 0.57% to close at 39,605.8, bolstered by the financial and healthcare sectors. Conversely, the broader Topix index fell by 0.24%, finishing at 2,706.2.
South Korea: The Kospi index closed marginally lower at 2,596.91, while the small-cap Kosdaq decreased by 0.59% to 770.87.
Australia: The S&P/ASX 200 index in Australia fell by 0.1% to close at 8,214.5.
Hong Kong: Hong Kong markets remained closed on Friday due to a public holiday.
U.S. Market Recap
In the U.S., major indices closed lower, with the S&P 500 down 0.21% at 5,780.05, the Dow Jones Industrial Average dropping 0.14% to 42,454.12, and the Nasdaq Composite edging down 0.05% to end at 18,282.05.
The U.S. consumer price index (CPI) rose by 0.2% month-over-month, leading to an annual inflation rate of 2.4%, higher than forecasts of a 0.1% monthly increase and a 2.3% year-over-year rate according to a Reuters poll. While the annual inflation figure is the lowest since February 2021, it raises concerns that the Federal Reserve may slow the pace of future rate cuts.
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