Updated February 21st, 2024 at 16:26 IST

Asian stocks dip amid fed rate cut uncertainty; investors await policy meeting minutes

US stocks closed lower, particularly on the Nasdaq, as chipmaker Nvidia stumbled ahead of its earnings report.

Reported by: Business Desk
Asian stocks bounce on China spending plans | Image:Freepik
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Asian stocks dip: Asian stocks edged lower on Wednesday as waning expectations of early interest rate cuts from the Federal Reserve dampened risk appetite, with investors eagerly anticipating the minutes of the US central bank's recent meeting for insights into its policy outlook.

The MSCI's broadest index of Asia-Pacific shares outside Japan slipped by 0.09 per cent on Wednesday. Japan's Nikkei also dipped by 0.21 per cent, while China stocks exhibited a mixed performance in early trading following a significant reduction in the nation's benchmark mortgage rate aimed at supporting the struggling property market.

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China's blue-chip CSI300 index fell by 0.6 per cent, while Hong Kong's Hang Seng Index rose by 1 per cent. The regulatory crackdown on major quant fund Lingjun Investment, which was barred from trading for three days due to violations, added to market uncertainties.

Uplifting market sentiment 

Despite a notable mortgage rate cut in China, analysts suggest that more measures are needed to uplift market sentiment. Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, noted that China's policy actions tend to unfold gradually, which could delay the desired impact on the market.

In the US, stocks closed lower, particularly on the Nasdaq, as chipmaker Nvidia stumbled ahead of its earnings report. Traders are now focusing on the Federal Reserve's minutes for any hints on the timing of its easing cycle. Markets have shifted expectations of a rate cut to June, compared to the earlier anticipated start in March.

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The changing rate outlook has bolstered the dollar, while the yen remains near a three-month low. Japan's exports, which rose more than expected in January, have helped alleviate some concerns about demand and output following the country's unexpected recession in the fourth quarter.

(with Reuters inputs)

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Published February 21st, 2024 at 11:13 IST