Asian equities started the week on a subdued note as investors braced for a slew of corporate earnings and awaited delayed economic data from the U.S., with particular attention on monetary policy signals and the sustainability of gains in artificial intelligence related stocks.
Lingering caution among Federal Reserve policymakers has shifted market predictions for a U.S. interest rate cut in December, reducing the probability from over 60% to around 40% as of Monday. This recalibration has contributed to mounting pressure on equity markets.
Japan’s Nikkei 225 retreated 0.51% after government data showed the economy contracted 0.4% quarter-on-quarter in September, a milder decline than analysts forecast. In contrast, South Korea’s Kospi surged 1.50%. Hong Kong’s Hang Seng Index edged down 0.32%, while China’s Shanghai Composite Index traded slipped 0.43%. The ASX 200 in Australia dipped 0.33%.
In U.S. trade last Friday, the S&P 500 closed marginally lower at 6,734.11, shedding 0.05%. The Nasdaq Composite rose 0.13% to 22,900.59 while the Dow Jones Industrial Average slid 0.65% to end at 47,147.48.
Oil prices jumped more than 2% at the end of last week, as a Ukrainian drone attack on Russia’s Novorossiysk port temporarily halted exports, fueling supply concerns. Brent crude futures settled $1.38 higher, up 2.19% at $64.39 per barrel, with West Texas Intermediate gaining $1.40, or 2.39%, to close at $60.09.
However, the momentum reversed in early Asian trade on Monday as Novorossiysk resumed operations after a two-day disruption. Brent crude slipped 58 cents, or 0.9%, to $63.81 per barrel. WTI contracted 59 cents, equivalent to 1.0%, landing at $59.50 per barrel.
Gold came under pressure, tumbling more than 3% on Friday in the wake of a broader sell-off prompted by hawkish commentary from Federal Reserve officials, diminishing optimism for a year-end rate cut. In early trading hours in Asia, spot gold was last down 0.13% at $4,088.80 per ounce.
