Asian stock markets experienced a downturn on Monday due to anticipation of the U.S. Federal Reserve's upcoming interest rate decision. Concerns were further heightened by disappointing retail sales data from China, which raised doubts about the recovery of the world's second-largest economy.
The Fed is expected to announce a 25 basis point cut in interest rates, but uncertainty remains regarding the central bank's long-term rate strategy due to inflationary pressures.
Chinese equities initially showed signs of recovery but ultimately declined, while Hong Kong's index also fell. Despite stimulus measures from Beijing, retail sales figures fell short of expectations, indicating weaknesses in consumer spending. This has dampened market sentiment across Asia and contributed to a cautious global tone as investors await signals from the Federal Reserve.
In Japan, the stock market remained stable ahead of the Bank of Japan's meeting, where interest rates are expected to be maintained. Japan's economy has contracted for the sixth consecutive month, but some sectors have shown resilience.
South Korea's stock market remained relatively stable despite the impeachment of President Yoon Suk Yeol, with the finance ministry pledging measures to support the economy.
Global investors are adopting a cautious stance as the Federal Reserve's meeting approaches, with uncertainty and scrutiny surrounding the central bank's future policy decisions. Asian markets have experienced declines, reflecting the broader trend of uncertainty in the region. However, there are slight rises in India's market and Malaysia's index, indicating some regional divergence in investor sentiment.
The interplay of economic data, geopolitical developments, and central bank policies continues to shape Asian markets, with the focus on the Federal Reserve's upcoming decision and its potential impact on global financial markets.