Asian Markets Fall Ahead of Key US Inflation Report
Shares in most Asian markets dropped on Thursday as investors awaited a crucial U.S. inflation report scheduled for Friday. This report could provide insight into the future direction of interest rates.
Tokyo, Hong Kong, and Sydney saw benchmarks decline by more than 1%. Oil prices and U.S. futures also experienced a downturn.
The focus of the markets this week is on the U.S. government’s upcoming inflation report. The Personal Consumption Expenditures Index (PCE), used by the Federal Reserve to measure inflation, has put investors in a cautious stance following recent mixed data.
The latest inflation updates could influence the Federal Reserve’s decision on when to start reducing interest rates, which are currently at their highest level in over two decades, impacting global markets.
In Asian trading, efforts in China to stimulate the property market did not boost market sentiment. Hong Kong’s Hang Seng fell by 2%, and the Shanghai composite index dropped by 0.6%.
The move in Beijing to prop up the property sector involved reducing minimum down-payment ratios and mortgage interest rates, effective Thursday. Other Chinese cities have implemented similar measures as part of national policies to attract buyers back to a market that has been struggling.
In Tokyo, the Nikkei 225 index fell by 0.8% amidst concerns about further weakness in the Japanese yen. The U.S. dollar was trading at 160.35 yen, its lowest level since 1986, prompting warnings from Japanese officials about potential market interventions.
Despite the overall decline in Asian markets, shares rose in Mumbai, Jakarta, and Singapore, while benchmarks on Wall Street remained close to their recent record highs.
Key stocks like Amazon, FedEx, and Apple played a role in offsetting broader declines in the S&P 500 index. Investors are hopeful for a rate cut from the Federal Reserve at its September meeting to address inflation and high borrowing costs.
Benchmark U.S. crude oil prices dropped slightly to $80.79 per barrel, while the euro rose to $1.0696 from $1.0681.
