Asia-Pacific markets closed mixed on Wednesday as investors awaited the outcome of a key economic policy meeting in China. The meeting is part of China’s annual economic work conference, where the government outlines its policies and growth targets for the upcoming year. Hong Kong’s Hang Seng index ended the day 0.76% lower in its final hour of trading.
In mainland China, the CSI 300 index slid 0.17%, closing at 3,988.83. South Korea’s markets had a more positive outlook. The KOSPI index rose by 1.02% to close at 2,442.51, while the Kosdaq index climbed 2.17% to 675.92.
This boost came a day after the country’s parliament approved a reduced budget of 673.3 trillion won ($470.60 billion) for 2025. South Korea also reported a seasonally adjusted unemployment rate of 2.7% in November, unchanged from the previous month. Japan’s Nikkei 225 rose to 39,372.23 and the broader Topix index advanced by 0.29% to 2,749.31.
In Australia, the S&P/ASX 200 index fell by 0.47% to close at 8,353.6.
In the United States, Wall Street continued its downward trend. The Dow Jones Industrial Average fell for the fourth consecutive day, losing 154.10 points, or 0.35%, to end at 44,247.83. The S&P 500 dipped 0.3% to close at 6,034.91, and the Nasdaq Composite dropped 0.25% to 19,687.24.
China’s economic policy anticipation
Investors are keenly awaiting the U.S. consumer price index report for November, which is expected to impact the Federal Reserve’s interest rate decisions during their policy meeting from December 17 to 18. Experts predict the consumer price index will rise slightly, potentially accelerating by 0.1 percentage points from the prior month, surpassing the Fed’s targeted annual inflation rate of 2%.
China’s top leadership signaled a shift in monetary policy on Monday, indicating deep-seated economic challenges. The stance is set to shift to “moderately loose” from the previously “prudent” policy. However, experts such as Larry Hu, chief economist at Macquarie, suggest that a dramatic, “bazooka-style” stimulus is unlikely despite the change.
Japan’s wholesale inflation rate surpassed expectations for the third consecutive month in November. The producer price index increased by 3.7% year on year, higher than the revised 3.6% rise in October, and above the 3.4% expected by Reuters. This stronger-than-expected inflation reading may bolster the case for the Bank of Japan to raise interest rates in its upcoming meeting set to conclude on December 19.
In corporate news, Japanese life insurer Nippon Life announced an $8.2 billion acquisition of U.S. counterpart Resolution Life. Chinese battery maker CATL shares increased by 1.2% after announcing a joint venture to build a large-scale electric vehicle battery factory in Spain. Eight stocks in the S&P 500 hit new 52-week highs during Tuesday’s trading session, reflecting ongoing market volatility.
Citi economists forecast that although there may be gains in 2025, volatility will likely persist due to uncertain policy outlooks and elevated valuations. However, they have a positive projection for U.S. equities, based on a hopeful “soft landing” for the economy and the influence of evolving technologies like Artificial Intelligence.
