Asian stock markets displayed a mixed performance on Wednesday, influenced by new data indicating a continued, albeit reduced, decline in China's industrial profits for October compared to September. Concerns about tariffs persisted as U.S. President-elect Donald Trump appointed another China critic, Jamieson Greer, as the United States Trade Representative (USTR). Additionally, Trump named Kevin A. Hassett to lead the White House National Economic Council, positioning both figures crucially in enacting the economic policies of the incoming administration.
Jamieson Greer previously played a pivotal role in Trump's initial term, implementing tariffs on China and other nations to counteract perceived unfair trade tactics and renegotiating the North American Free Trade Agreement (NAFTA) into the United States-Mexico-Canada Agreement (USMCA). Kevin Hassett significantly contributed to the development and passage of the Tax Cuts and Jobs Act of 2017.
The U.S. dollar remained stable during Asian trading, with investors apprehensive about Trump’s economic strategies and anticipating the release of the U.S. Core Personal Consumption Expenditures (Core PCE) Price Index for October later that day.
Oil and gold markets experienced gains as investors considered the implications of a potential ceasefire agreement between Israel and Hezbollah.
China's Shanghai Composite Index climbed 1.53% to settle at 3,309.78, following data that showed a reduced decline in industrial profits to 10% year-on-year in October, compared to 27.1% in the previous month. Meanwhile, Hong Kong's Hang Seng Index surged 2.32% to 19,603.13, recovering from a two-month low.
In Japan, stock markets fell due to the Japanese yen's strength, adversely affecting automotive stocks such as Honda, Toyota, and Nissan, which declined by 3-5%. Investors also expressed concerns about the potential impact of Trump’s tariff policies. The Nikkei Index dropped by 0.80% to close at 38,134.97, while the broader Topix Index decreased by 0.90% to finish at 2,665.34.
In Seoul, South Korean stocks also declined, with the Kospi Index losing 0.69% to end at 2,503.06. Semiconductor stocks were hit particularly hard, with Samsung Electronics falling 3.4% and SK Hynix plunging 5%, amid heightened uncertainty related to the U.S. CHIPS Act.
Conversely, Australian markets advanced following reports that Australia's consumer price inflation rate remained at a three-year low in October, prompting speculation among analysts of a probable 25 basis point interest rate cut by May 2025. The benchmark S&P/ASX 200 increased by 0.57% to 8,406.70, and the broader All Ordinaries Index rose by 0.55% to 8,659.60. Shares of Web Travel Group jumped 13.5% after announcing favorable half-year results. Among financial stocks, Commonwealth Bank of Australia and QBE Insurance both gained over 2%.
Meanwhile, New Zealand’s benchmark S&P/NZX 50 Index rose by 0.76% to 13,212.92, after the country's central bank cut interest rates by 50 basis points, marking its third consecutive reduction, and hinted at further easing measures to stimulate the struggling economy.
U.S. markets saw gains overnight following Trump's threat to impose heightened tariffs on Mexico, Canada, and China to address illegal immigration and drug trafficking issues. Federal Reserve minutes revealed a preference for a gradual rate-cutting strategy, contingent on economic data meeting expectations, maintaining a downward inflation trend towards 2%, and keeping the economy close to maximum employment. The Dow climbed 0.3% to reach a new record high, the S&P 500 grew by 0.6% to continue its winning streak for a seventh consecutive session, and the tech-heavy Nasdaq Composite also increased by 0.6%.
