Investing.com– Most Asian stocks rose Wednesday, following a rebound on Wall Street as investors welcomed the prospect of anticipated interest rate cuts by the Federal Reserve, while Chinese stocks were lower. lagging due to bleak economic outlook.
A – which puts US stock indexes within reach of new records – showed that the post-Federal Reserve rally still had some way to go, especially as investors remained convinced that the central bank could begin
This sentiment spread to Asian markets, helping regional stock markets extend recent gains.
Australia’s index jumped 1.1% to its highest level since April 2022, while a rebound in video game stocks, particularly heavyweight Tencent Holdings Ltd (HK:), saw the index of Hong Kong increase by 1.2%.
Indian index futures pointed to a positive open, with the index remaining on course to hit record highs. The index was also among Asia’s best performing exchanges in 2023, up almost 18%.
The Nikkei rallies to more accommodating signals from the BoJ and obtains the best performance in 2023
Japan was among the day’s biggest gainers, up 1.1%. The index was also boosted by the Bank of Japan’s December meeting, which showed central bank members believe monetary policy remains ultra-accommodative for the time being.
The BoJ’s conciliatory policy and signs of some resilience in the Japanese economy have enabled local stocks to achieve a meteoric rally this year. The Nikkei was Asia’s best-performing stock index through 2023, up 30% and also outperforming most of its global peers. In comparison, the stock was trading up about 24% for 2023.
Whether the Nikkei could extend its outperformance into 2024 remains to be seen, especially as the BoJ has signaled it will begin tightening policy in the coming year. The Japanese economy is also facing growing difficulties linked to the slowdown in its main export markets, mainly China.
Chinese stocks lag as economic outlook remains bleak
China’s and China’s indexes fell about 0.2% each on Wednesday and remained near yearly lows as sentiment toward the country showed few signs of improvement.
Data released Wednesday showed the Chinese improved in November, but are still down 4.4% year to date.
China’s post-Covid economic rebound has largely failed to materialize this year, with consumer spending worsening while foreign investors have also slowed capital investment in the country. This situation has been exacerbated by Beijing adopting a rather conservative stance on rolling out more stimulus measures.
Chinese stocks were the worst performers in Asia in 2023, with the CSI 300 and Shanghai Composite down 14% and 6.3% for the year, respectively.
The markets were now waiting for December figures, expected next week, to obtain more clues on the Chinese economy. Official PMIs for November indicated a further deterioration in activity, although they showed some improvement.
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