Asian Stocks Mixed Amid U.S. Inflation Concerns

Asian stocks exhibited mixed results on Wednesday as investors proceeded with caution ahead of a significant U.S. inflation report, while Chinese stocks gained in anticipation of further government stimulus measures.

Geopolitical tensions in the Middle East, particularly following the ousting of Syria's government by rebel forces, led investors to limit risk exposure.

U.S. stock index futures were slightly higher in Asian trading after concluding lower overnight due to weakness in technology stocks. The focus is now on the consumer price index data set to release later in the day, which could provide cues regarding U.S. interest rates.

China, Hong Kong Shares Rise Ahead of CEWC

The Shanghai Composite index rose 0.4% on Wednesday, and the Shanghai Shenzhen CSI 300 index gained 0.2%. Meanwhile, Hong Kong’s Hang Seng index jumped 0.8%, following sharp gains recorded earlier this week.

Attention is directed towards China’s Central Economic Work Conference (CEWC), a two-day meeting starting later in the day. This meeting represents the backdrop to China's Politburo signaling a dovish approach towards implementing additional stimulus and support for economic growth.

According to discussion from a Politburo meeting chaired by President Xi Jinping, the government plans to adopt proactive fiscal stimulus measures and moderately looser monetary policies in 2025.

However, analysts at ANZ warned that impending increases in U.S. import tariffs could significantly impact China's economy, potentially lowering its gross domestic product (GDP) by 1.5% over the next few years.

Broader Asian markets were slightly higher, with Indonesia’s Jakarta Stock Exchange Composite Index rising 0.5%, and India’s Nifty 50 Futures indicating a marginal rise at open. South Korea's KOSPI rose 0.6%, recovering some losses from earlier in the week, though concerns persist over President Yoon Suk Yeol, who is under investigation for insurrection.

Japan Shares Fall Amid Rate Hike Speculation

Japan's Nikkei 225 fell 0.6%, while TOPIX was down 0.3%. Recent data indicated Japan's wholesale inflation increased for the third consecutive month in November, putting upward pressure on the Bank of Japan to consider raising interest rates amid persistent inflation.

Markets are divided over the possibility of the BOJ raising rates during its meeting next week, especially after data showed Japan's economy grew slightly more than expected in July-September, though the growth rate slowed sharply from the previous quarter.

In other regions, Australia’s S&P/ASX 200 lost 0.5% after the country’s central bank kept interest rates steady but adopted a somewhat dovish stance. Taiwan’s Weighted index declined 0.6%, Malaysia’s FTSE Malaysia KLCI index fell 0.5%, and the Philippines’ PSEi Composite index edged down by 0.3%.