Stock Market Today: Asian Shares Retrench Amid Wall Street Drop

HONG KONG (AP) — Asian shares fell on Friday as they mirrored the decline seen on Wall Street, prompted by disappointing economic data from the United States.

U.S. futures and oil prices remained stable amidst the declines.

Chinese officials concluded a two-day economic policy meeting in Beijing on Thursday. Investors were looking for significant measures to support the slowing economy; however, the announcements from this closed-door meeting did not provide much clarity. According to state media, leaders agreed on plans to increase government borrowing for more spending, as well as easing credit conditions to stimulate investment and consumption.

“Chinese authorities seem to be in a reactive stance, as uncertainty regarding U.S. tariff policies prevents decisiveness in their actions,” noted Yeap Jun Rong from IG.

The Hang Seng index in Hong Kong dropped 1.7% to 20,057.69, while the Hang Seng Properties index saw a decline of 3%. The Shanghai Composite index fell by 1.5% to 3,410.99.

In Japan, the benchmark Nikkei 225 decreased by 1.2% in morning trading, landing at 39,360.43. Interestingly, a survey conducted by the Bank of Japan indicated that business sentiment was better than expected among large manufacturers for the fourth quarter.

Other Asian markets had mixed results: Australia’s S&P/ASX 200 fell 0.5% to 8,292.40, whereas South Korea’s Kospi managed a modest increase of 0.6% to 2,497.61.

On the other side of the Pacific, Wall Street experienced losses on Thursday, with the S&P 500 declining by 0.5% to 6,051.25, marking its fourth decline in six days. This decline comes after a strong rally throughout the year.

The Dow Jones Industrial Average also lost 0.5%, closing at 43,914.12, while the Nasdaq composite dropped 0.7% to 19,902.84.

Recent reports highlighted that more U.S. workers applied for unemployment benefits last week than analysts had anticipated. Additionally, wholesale-level inflation was higher than expectations. While these reports do not indicate immediate alarm, they dampen hopes for further interest rate cuts by the Federal Reserve.

Such expectations had previously fueled the S&P 500, which has reached an impressive 57 all-time highs this year, as inflation showed signs of slowing down while the economy stayed resilient.

Market observers widely expect the Federal Reserve to ease interest rates at its upcoming meeting next week, with this likely marking a third consecutive cut after starting to lower rates in September from a two-decade high. The Fed aims to support the job market amidst concerns of inflation approaching its 2% target.

A rate cut could provide a boost to both the economy and investment prices, yet it also risks intensifying inflationary pressures.

Notably, a rate cut from the Fed would align it with movements by other central banks. Recently, the European Central Bank reduced rates by a quarter point, while the Swiss National Bank opted for a more significant half-point cut. Following its decision, the Swiss central bank referenced uncertainties tied to U.S. economic policies following Donald Trump's election victory, as well as future political directions in Europe.

Trump's administration has hinted at potential tariffs and policies that may disrupt global trade. He celebrated the start of trading at the New York Stock Exchange with chants of “USA.”

In the commodities market early Friday, U.S. benchmark crude oil rose by 8 cents to $70.10 per barrel. The international benchmark, Brent crude, increased by 6 cents to $73.47 per barrel.

Regarding currency exchanges, the U.S. dollar strengthened against the Japanese yen, reaching 153.06 from 152.55, while the euro slipped to $1.0462 from $1.0472.

Asia, Economy, Markets