Investing.com—Asian Stocks Dip Amid U.S. Election Concerns

Most Asian stocks fell on Wednesday due to a dampened risk appetite from anticipation surrounding a tight U.S. presidential election and key economic readings this week.

Japanese markets were an exception, with recent gains extending as heightened political uncertainty in Japan increased expectations that the Bank of Japan will not raise interest rates.

Regional markets responded moderately to Wall Street, where investment in technology stocks lifted the NASDAQ Composite to record highs, although other sectors dropped on Tuesday.

Wall Street futures rose during Asian trading, buoyed by solid earnings from Alphabet Inc (NASDAQ:GOOGL). Major tech companies, including Meta Platforms Inc (NASDAQ:META) and Microsoft Corporation (NASDAQ:MSFT), are set to announce earnings on Wednesday, with Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) scheduled for Thursday.

Additionally, a series of important U.S. economic indicators are expected this week, coinciding with a Federal Reserve meeting next week.

Japan’s Nikkei Surges on Tech Gains, BOJ Anticipation

On Wednesday, Japan’s Nikkei 225 index rose over 1%, while the TOPIX index added 0.8%. Gains in technology stocks significantly boosted the Nikkei, with Japanese tech firms following their U.S. counterparts' performance.

Japanese markets continued their upward trend following the ruling Liberal Democratic Party's loss of parliamentary majority in recent elections, leading to a more uncertain political landscape.

This situation has heightened expectations of increased fiscal spending from the Japanese government, while growing uncertainty is likely to deter the BOJ from further interest rate hikes. The yen fell, aiding local stocks that benefit from exports.

The BOJ is expected to maintain interest rates unchanged on Thursday and may encounter greater political resistance concerning future rate hikes.

Chinese Stocks Muted with PMIs, Stimulus Cues on Tap

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes remained relatively flat, while Hong Kong’s Hang Seng index dropped by 0.4%.

This week, attention is on purchasing manager index readings due on Thursday and Friday, which are anticipated for cues on the economic performance of Asia's largest economy amid sluggish growth.

Recently, Beijing announced various significant stimulus measures, yielding limited investor optimism. Markets are currently looking for further fiscal stimulus cues from China’s National People’s Congress meeting next week.

Overall, broader Asian markets were predominantly negative, with risk sentiment under pressure. Safe-haven assets, like gold, reached record highs on Wednesday.

Australia’s ASX 200 decreased by 0.6% following third-quarter consumer price index data, indicating underlying inflation’s stickiness, possibly prompting a hawkish approach from the Reserve Bank of Australia, which will meet next week.

South Korea’s KOSPI fell by 0.2%, mirroring an 8% decline in AMD (NASDAQ:AMD) shares after the chipmaker presented a disappointing outlook for the current quarter.

Futures for India’s Nifty 50 index indicated a steady opening after positive earnings helped break a prolonged losing streak earlier this week.