Asian markets mixed after Wall St losses

HONG KONG (AFP/ APP): Asian markets were mixed Thursday as investors took their foot off the gas after an extended rally fuelled by expectations the Federal Reserve will slash interest rates next year.

A stream of data in recent weeks has shown inflation continues to slow and the jobs market is softening, while other economic indicators suggest the central bank is on course to bring prices under control while averting a recession.

The latest figures on Wednesday showed US consumer confidence bouncing back more than forecast, while home sales came off a 13-year low.

Eyes are now on the release Friday of the personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation, which could be key in the bank’s decision-making at its next meeting in January.

The most recent gathering ended with officials indicating they would cut about three times in 2024, sparking a buying frenzy in markets and forcing some policymakers to try to temper expectations.

The data could “hold the crucial tarot cards likely to steer market dynamics into year-end and beyond”, said SPI Asset Management’s Stephen Innes.

“An upside surprise in the figures is crucial to bolster the credibility of the Federal Reserve’s efforts to push back against market rate cut expectations. Failure to see an upside surprise could challenge the Fed to counter expectations of a rate cut in March.

“In such a scenario, risk assets could rebound, and the year-end rally would likely regain momentum.”

The upbeat data was not enough to stop investors taking their cash off the table, with observers saying a pullback was inevitable after such a strong rally.

“It certainly looks like it has become very one-sided, and it is a scary world when everybody gets on one side of the boat,” said Cameron Dawson of Newedge Wealth.
“The market is very extended, we do see it being very overbought. But we’re in this melt-up period and so oftentimes things can get even sillier before they really do have a pullback,” he told Bloomberg Television.

Wall Street’s three main indices lost more than one percent apiece, with the Dow coming off five straight records.

And Asia followed suit in the morning but fared better in the afternoon
Tokyo, Hong Kong, Sydney, Seoul, Taipei, Jakarta and Manila retreated but. Shanghai, Singapore, Mumbai, Bangkok and Wellington eked out gains.

In corporate news, Toyota fell four percent in Tokyo — having dropped more than five percent at one point — after subsidiary Daihatsu said Wednesday it will suspend shipments of all car models in Japan and abroad following news it had rigged safety tests.

The news got worse for the world’s biggest carmaker later in the day when it said it was recalling around a million Toyota and Lexus vehicles in the United States, citing concerns about their airbag systems.

Meanwhile, China Three Gorges South Asia Investment Limited (CSAIL) and National University of Science and Technology (NUST) signed a Memorandum of Agreement (MoA) to establish a comprehensive cooperation.

The inauguration ceremony for the internship base for university students held at the Karot project camp. Karot Hydropower Station has officially become the first internship base of NUST, featuring Chinese technology and training methods.

This development creates opportunities for joint training of China-Pakistan versatile talents. The MoA was signed during Dr. Adeel Waqas’s first visit to the Karot project.
Dr. Waqas, the principal of the university’s Center for Advanced Studies in Energy, along with 28 members of his team, visited the Karot project site and received a comprehensive briefing on the spillway, power plant, dam, and power generation process, CEN reported.

Wang Minsheng, CEO of CSAIL, provided a comprehensive introduction to the Karot project, Three Gorges International and the main business of China Three Gorges Corporation.

The two sides signed this MoA after thorough communication in the early stage. They plan to establish internship projects for college students in relevant majors in batches starting from 2024. Additionally, they aim to collaborate on scientific research and innovation in the field of energy.