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Investing.com-- Asian stock markets were mixed on Wednesday, with Japan and South Korea leading gains while other regional markets remained subdued, as investors weighed rising expectations of a U.S. Federal Reserve rate cut next week.
Australian equities were largely unchanged after the country’s economy posted its strongest annual growth in two years in the third quarter, but quarterly growth fell short of expectations.
Wall Street indexes ended modestly higher overnight, with the tech sector leading gains, while futures tied to them edged higher in Asian trading on Wednesday.
Japan, S. Korea shares rise tracking Wall St gains
Japan’s Nikkei 225 jumped 1.6%, while South Korea’s KOSPI added 1.3%.
Investors have sharply increased bets on a December rate cut by the Fed, citing slowing inflation and weaker economic signals. According to the CME FedWatch Tool, the probability of a 25‑basis-point cut has surged above 85%, up from below 40% a week ago.
However, market participants remain cautious, noting mixed signals from Fed policymakers that leave the timing and magnitude of any action uncertain.
Traders are closely monitoring upcoming U.S. data releases, including the ADP employment report and the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge.
Back in Asia, Singapore’s Straits Times Index edged 0.3% higher, while India’s Nifty 50 fell 0.4%.
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Australia Q3 GDP rises 2.1% y/y
In China, the blue chip Shanghai Shenzhen CSI 300 and the Shanghai Composite index were largely muted. Hong Kong’s Hang Seng slipped over 1%.
Equities dipped after a private survey showed services-sector growth slowed to a five-month low in November, with the services PMI falling to 52.1 from 52.6. The slowdown reflected weaker new orders and continued job contractions, even as export activity showed modest improvement.
Australia’s S&P/ASX 200 was largely unchanged, following the release of third-quarter GDP data. The economy grew 0.4 % quarter-on-quarter, below forecasts of 0.7 %, though annual growth reached 2.1 %, the fastest in two years.
Slower quarterly growth reflected inventory drag, while household consumption and business investment remained firm. The relatively strong added to uncertainty about near-term monetary easing by the Reserve Bank of Australia.