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Uncertain Start to Rate Cuts Sways Asia-Pacific Stocks Uncertain Start to Rate Cuts Sways Asia-Pacific Stocks

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Investors in Asia-Pacific markets faced a tumultuous day as U.S. Fed minutes delivered a disquieting signal about the initiation of rate cuts. The markets saw a general trend of decline, with Japan (NKY:IND) suffering a 0.53% drop following Japan’s final December manufacturing PMI of 47.9, compared to the previous 48.3.

Adding to the region’s woes, Japan was struck by a devastating earthquake, claiming no less than 65 lives, and a collision at Tokyo’s Haneda airport involving Japan Airlines.

China (SHCOMP) also endured a dip of 0.43%, compounded by an unexpected rise in the China Caixin Services PMI for December, which stood at 52.9 against an anticipated 51.6. Furthermore, traders were dismayed as the Chinese economic planner hiked gasoline and diesel retail prices, citing adjustments to global oil prices.

In Hong Kong (HSI), the reds loomed with a 0.13% decrease, while India (SENSEX) defied the trend with a 0.73% uptick. Meanwhile, Australia (AS51) faced a 0.39% slide following the release of the Australian December Services PMI, which closed at 47.1, compared to the preceding 46.0.

The Federal Reserve’s release of the latest FOMC minutes cast a pall on global markets, leading to a downturn in U.S. stocks. The unsettling revelation from the minutes indicated a likelihood of higher interest rates for a prolonged period, triggering apprehension among investors. The minutes provided scant clarity on the timing of prospective rate cuts, with the Fed acknowledging β€œan unusually elevated degree of uncertainty” about the economic outlook, leaving the door open for potential further rate increases.

However, a glimmer of hope emerged as U.S. stock futures showed signs of stabilization on Thursday. The Dow witnessed a modest increase of 0.10%, while the S&P 500 and Nasdaq edged up by 0.11% and 0.13%, respectively. Traders around the globe now await the release of the US jobs data for December and India’s service sector report, scheduled for Friday.

Currencies: (JPY:USD), (CNY:USD), (AUD:USD), (INR:USD), (HKD:USD), (NZD:USD).

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