Green Asia

Marketmind: Markets in a holiday mood

A look at the day ahead in Asian markets from Lewis Krauskopf, markets correspondent.

Markets were buoyant ahead of Asia trading and the Thanksgiving holiday in the U.S., with stocks resuming their massive rally this month that has been fueled by hopes of a more benign interest rate backdrop.

Wall Street’s benchmark S&P 500 closed up 0.4 per cent, and was nearing a fresh high for 2023. The S&P 500 and MSCI’s all-country index are both up over 8 per cent this month alone, with the tech-heavy Nasdaq Composite up 11 per cent.

Markets were still digesting minutes from the Federal Reserve’s latest meeting, which revealed that central bank officials agreed they would proceed carefully and only raise interest rates if progress in controlling inflation faltered.

Indeed, many investors now seem confident the Fed may be done raising rates for this cycle, and are eyeing the middle of next year for when the central bank may start to make cuts.

Even Nvidia’s selloff following its results couldn’t dampen Wednesday’s mood. After soaring well over 200 per cent this year, Nvidia shares ended down 2.5 per cent on Wednesday amid fears that widening U.S. chip curbs would sap growth in China.

Aside from Nvidia, other members of the Magnificent Seven megacap group rallied on Wednesday, with Amazon gaining nearly 2 per cent and Alphabet and Microsoft up over 1 per cent.

A Reuters poll of stock market experts found most key global stock indexes are forecast to rise modestly over the coming year.

Japanese markets were also set to be closed for a national holiday on Thursday. On Wednesday, the Nikkei edged up 0.3 per cent, putting the Japanese index near a fresh three-decade high.

Also in Wednesday’s session, China stocks slid as market participants awaited more stimulus for the Chinese economy. The blue-chip CSI 300 Index sank 1 per cent.

Reuters reported that Chinese government advisers will recommend economic growth targets for next year ranging from 4.5 per cent to 5.5 per cent to an annual policymakers’ meeting, as Beijing seeks to create jobs and keep long-term development goals on track.

Meanwhile, the dollar index rose, bouncing back from a 2-1/2 month low. Economic data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week.

The yen weakened on Wednesday, trading at around 150 per dollar. While speculation that the Bank of Japan could exit from negative interest rates early next year stands to help stabilize the yen, the Japanese currency still faces strong headwinds.

Oil prices dropped as OPEC+ producers unexpectedly delayed a meeting on production cuts.

Trading volumes were set to be subdued for the rest of the week with markets in the U.S. closed on Thursday.

Here are key developments that could provide more direction to markets on Thursday:

– Singapore CPI

– Indonesia Central Bank meeting

– Euro zone flash PMIs

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