Asia report: Markets mixed on Fed minutes, Singapore GDP jumps

Asia-Pacific markets experienced a mixed trading day on Wednesday, influenced by revelations from the US Federal Reserve’s October minutes overnight.

In the minutes, policy officials expressed a commitment to maintaining restrictive monetary policy, showing reluctance towards rate cuts.

“Markets are relatively quiet as traders ease into the Thanksgiving lull - a few folks are predictably fading the minutes, as would be expected,” said SPI Asset Management managing partner Stephen Innes.

“As the street knows, the data will need to shift hawkishly to change the ‘insurance’ rate-cut narrative.

“Nvidia seems to be the topic de jour in most circles.”

Innes said expectations for Nvidia’s third-quarter results and fourth-quarter guide were sky-high, adding that the shares were “priced beyond perfection”.

“Consensus aside, it’s hard to say where ‘the bar’ is at this point, and therefore, it’s hard to know whether Nvidia cleared it.

“Second, this week’s breathless media circus around the OpenAI soap opera has convinced me that the AI frenzy is overblown, at least in the near term.”

Markets mixed but little changed across Asia-Pacific

In Japan, the Nikkei 225 index rose by 0.29% to reach 33,451.83, while the Topix index gained 0.44%, closing at 2,378.19.

Leading the gains on Tokyo’s benchmark was CyberAgent, surging by 4.95%, with Mitsui Engineering & Shipbuilding rising by 3.14% and Mitsui Chemicals posting a 3.06% gain.

In China, the Shanghai Composite index dipped by 0.79% to settle at 3,043.61, and the Shenzhen Component index declined by 1.41% to reach 9,855.66.

Chongqing Fenghwa Group and Epoxy Base Electronic Material faced significant losses in Shanghai, dropping by 10% and 9.94%, respectively.

Hong Kong’s Hang Seng Index saw a marginal increase of 0.004%, closing at 17,734.60.

Baidu led the gainers with a 4.47% increase, followed by Country Garden Services with a 2.27% increase and China Unicom Hong Kong with a 1.59% gain.

In South Korea, the Kospi index inched up by 0.05% to reach 2,511.70, with notable gainers including NCsoft, climbing by 6.45%, and Hyundai Heavy Industries, which rose by 4.31%.

Australia’s S&P/ASX 200 index experienced a slight decline of 0.07%, closing at 7,073.40, as Ebos Group and Liontown Resources faced losses of 5.43% and 4.93%, respectively.

New Zealand’s S&P/NZX 50 index posted a modest gain of 0.05%, closing at 11,169.80, with Vista Group International and Infratil among the top performers, rising by 2.84% and 2.13%, respectively.

In the currency market, the dollar was last 0.27% stronger on the yen, trading at JPY 148.79, while it decreased 0.12% against the Aussie to AUD 1.5235.

The greenback posted a 0.15% gain on the Kiwi, changing hands at NZD 1.6556.

On the oil front, Brent crude futures were last down 0.82% on ICE at $81.77 per barrel, while the NYMEX quote for West Texas Intermediate dropped 0.94% to $77.04.

Fed maintains status quo, Singapore GDP surges

In economic news, the Federal Reserve released the minutes from its late October meeting overnight.

The minutes emphasised the central bank’s commitment to maintaining a restrictive monetary policy to return inflation to its 2% target over time.

Elsewhere, Singapore’s economy showcased resilience in the third quarter, with year-on-year GDP growth reaching 1.1%, surpassing both advance estimates of 0.7% and the 0.5% growth recorded in the second quarter.

Economists’ expectations were also exceeded, as they had anticipated a growth rate of 0.7%.

On a seasonally adjusted quarter-on-quarter basis, GDP jumped 1.4% - a significant improvement from the 0.1% growth seen in the previous quarter.

In response to the positive figures, Singapore’s Ministry of Trade and Industry revised its GDP growth forecast for 2023 to “around 1%”, up from the previous range of 0.5% to 1.5%.

On the other hand, Japan flagged a more moderate pace of economic recovery, as the country’s Cabinet Office released a statement acknowledging a moderate recovery trend in the economy, albeit with recent signs of slowdown.

It said that key risks to growth included a global economic slowdown driven by tightening monetary policies and uncertainty surrounding the pace of China’s recovery.

In response to the challenges, the government said it intended to accelerate the adoption of a “new capitalism” approach, shifting the economy from a long-standing emphasis on cost-cutting to one driven by sustained wage increases and increased investment.

Reporting by Josh White for Sharecast.com.