On Wednesday, markets in the Asia-Pacific region experienced a mixed closing as investors remained on edge waiting for the results of a significant economic policy meeting in China. This gathering is part of China’s annual economic work conference, during which governmental policies and growth objectives for the next year are revealed. Hong Kong’s Hang Seng index wrapped up the trading day down by 0.76% in the last hour.
The CSI 300 index in mainland China fell by 0.17%, finishing at 3,988.83. However, South Korea’s markets displayed a more optimistic trend. The KOSPI index increased by 1.02%, closing at 2,442.51, while the Kosdaq index surged by 2.17% to end at 675.92.
This rise followed the approval of a reduced budget totaling 673.3 trillion won (approximately $470.60 billion) for 2025 by the country’s parliament. South Korea also reported a seasonally adjusted unemployment figure of 2.7% for November, unchanged from the previous month. Meanwhile, Japan’s Nikkei 225 index rebounded, reaching 39,372.23, with the broader Topix index rising by 0.29% to 2,749.31.
In Australia, the S&P/ASX 200 index declined by 0.47% to close at 8,353.6.
Meanwhile, in the United States, Wall Street extended its downward trend. The Dow Jones Industrial Average dropped for the fourth straight day, decreasing by 154.10 points, or 0.35%, to close at 44,247.83. The S&P 500 lost 0.3% as it concluded at 6,034.91, while the Nasdaq Composite fell by 0.25% to 19,687.24.
Expectations for China’s Economic Policy
Investors are eagerly anticipating the release of the U.S. consumer price index report for November, which is expected to influence the Federal Reserve’s interest rate decisions during their policy meeting scheduled for December 17 to 18. Analysts forecast that the consumer price index might experience a slight uptick, potentially accelerating by 0.1 percentage points from the previous month, exceeding the Fed’s target of an annual inflation rate of 2%.
On Monday, China’s top leadership hinted at a change in monetary policy, acknowledging ongoing economic difficulties. The policy stance is set to transition from “prudent” to a “moderately loose” approach. Nevertheless, analysts like Larry Hu, the chief economist at Macquarie, indicate that a significant, “bazooka-style” stimulus is improbable despite this shift.
In Japan, the wholesale inflation rate has exceeded expectations for the third consecutive month as of November. The producer price index rose by 3.7% year-on-year, surpassing the revised 3.6% increase from October and the anticipated 3.4% by Reuters. This stronger-than-expected inflation data may support the case for the Bank of Japan to consider raising interest rates in its upcoming meeting, set to conclude on December 19.
In corporate updates, Nippon Life, a major Japanese life insurer, announced an $8.2 billion deal to acquire U.S. counterpart Resolution Life. Shares of Chinese battery manufacturer CATL rose by 1.2% after revealing a joint venture aimed at establishing a large-scale electric vehicle battery factory in Spain. Eight stocks within the S&P 500 reached new 52-week highs during Tuesday’s trading session, reflecting ongoing market fluctuations.
Citi economists predict that while there could be growth in 2025, volatility is likely to persist due to uncertain policy outlooks and high valuations. However, they remain optimistic about U.S. equities, citing the potential for a “soft landing” for the economy and the impact of emerging technologies such as Artificial Intelligence.
