Most Asian Markets Drop As Traders Weigh US Rates Outlook

AFP/APP

Hong Kong: Most Asian markets closed lower on Tuesday, reacting to a negative lead from Wall Street fueled by profit-taking and uncertainties surrounding the outlook for U.S. interest rates.

Traders were particularly cautious after comments from Federal Reserve officials suggested a desire for a slower pace of rate cuts, dampening hopes for significant reductions in the upcoming meetings.

With the Dow and S&P 500 recently hitting all-time highs, investors stepped back amid growing concerns that stocks might be overbought and due for a correction.

The focus now shifts to the upcoming earnings season, with major tech companies like Alphabet and IBM set to report in the next two days, alongside firms such as Boeing, Coca-Cola, General Motors, and L’Oreal.

Market sentiment shifted as expectations for a 50-basis-point rate cut by the Fed decreased following strong U.S. economic data, including robust job creation figures.

Kansas City Fed President Jeffrey Schmid emphasized the need for a measured approach to rate adjustments to avoid contributing to market volatility. His views were echoed by other Fed officials, including Lorie Logan and Neel Kashkari, who advocated for caution.

Despite the overall downturn in Asia, Hong Kong and Shanghai managed slight gains, as investors anticipated potential stimulus from the Chinese government following recent announcements aimed at boosting the economy.

Gold prices surged to new highs, hitting a record of $2,740.59 amid rising tensions in the Middle East, while oil prices experienced a slight dip after an initial increase due to concerns about a broader conflict.

Key Figures (as of 0230 GMT):

• Tokyo – Nikkei 225: DOWN 1.4% at 38,399.47
• Hong Kong – Hang Seng Index: UP 0.6% at 20,596.63
• Shanghai – Composite: UP 0.3% at 3,278.38
• Euro/Dollar: DOWN at $1.0820
• Pound/Dollar: DOWN at $1.2991
• Dollar/Yen: UP at 150.74
• West Texas Intermediate: DOWN 0.4% at $70.27 per barrel
• Brent North Sea Crude: DOWN 0.4% at $74.03 per barrel
• New York – Dow: DOWN 0.8% at 42,931.60
• London – FTSE 100: DOWN 0.5% at 8,318.24

As the markets continue to navigate these uncertainties, all eyes remain on the Federal Reserve’s next moves and the upcoming earnings reports that could influence market direction.