Asian Stocks Mixed as Interest Rate Decisions Loom

Asian stocks were mixed on Tuesday as markets awaited interest rate decisions from major central banks later this week, following weak Chinese economic readings that affected risk sentiment.

The U.S. Federal Reserve will meet on Wednesday to decide its key interest rates, where a 25 basis point cut is largely expected. Markets were eager for insights on the Fed’s long-term rate trajectory from this meeting.

U.S. stock index futures fell slightly in Asian trade, despite indexes closing higher overnight, with gains driven by technology stocks.

Markets Await Interest Rate Decisions in Asia

In addition to the Fed meeting, interest rate decisions from Japan, Indonesia, Thailand, and the Philippines are also key this week.

Japan’s Nikkei 225 rose 0.3%, and the TOPIX ticked higher ahead of the Bank of Japan’s policy meeting. Reports suggest the BOJ is likely to keep interest rates unchanged, contrary to previous expectations of a hike.

Indonesia’s Jakarta Stock Exchange Composite Index slipped 0.5% with the Bank Indonesia (BI) set to make its key interest rate decision on Wednesday. A slim majority of economists in a Reuters poll anticipate BI will maintain its key rate to support the rupiah, a shift from expectations for a rate cut a month prior.

Thailand’s SET Index remained largely unchanged as the Bank of Thailand (BOT) is expected to keep its key interest rate unchanged on Wednesday following an unexpected rate cut in October. Market opinions are divided on whether the bank will maintain or further reduce the rate early next year.

The Philippines’ PSEi Composite index fell 1.5% ahead of the Bangko Sentral ng Pilipinas' (BSP) interest rate decision on Thursday. The central bank is anticipated to reduce its key policy rate by 25 basis points for the third consecutive time, as inflation remains manageable while the economy shows signs of weakening.

China, Hong Kong Stocks Drop After Weak Economic Data

China’s Shanghai Composite fell 0.5%, while the Shanghai Shenzhen CSI 300 index saw a 0.4% gain. Hong Kong’s Hang Seng index declined by 0.5%.

China’s industrial output increased as expected; however, a sharp deceleration in retail sales growth in November highlighted ongoing weaknesses in consumer spending.

Additionally, home prices declined at a somewhat slower pace, reflecting challenges in the real estate sector.

In other regions, Australia’s S&P/ASX 200 jumped 0.8%, while India’s Nifty 50 Futures indicated a negative start on Tuesday.

South Korea’s KOSPI index fell 0.9% amid a political crisis, as President Yoon Suk Yeol was impeached over his attempt to impose martial law in the country.