Asian stocks traded in narrow ranges on Wednesday, tracking Wall Street, as investors remained cautious ahead of a slew of economic data in the United States.
The MSCI regional index rose 0.1% as Hong Kong-listed Chinese stocks underperformed, while futures for the S&P 500 and Nasdaq 100 each climbed 0.2%, after the US benchmark index posted its sixth gain in seven sessions on Tuesday. Bitcoin continued its recovery after surging back above $91,000 in the previous session. In currency markets, the Indian rupee fell below a key psychological level of 90 rupees to the dollar.
Await interest rate decisions
The lackluster stock market movements indicated that sentiment remains fragile ahead of anticipated interest rate decisions this month from both the US Federal Reserve and the Bank of Japan. The ADP private-sector jobs report for November, along with import price index and industrial production data for September, are due later today, Wednesday. The long-delayed September personal consumption expenditures (PCE) price index—the Fed's preferred inflation gauge—will be released on Friday.
“The conditions are certainly not clear enough for a broad rally,” said Hebei Chen, an analyst at Vantage Markets in Melbourne. “Traders are still awaiting the upcoming US personal consumption expenditures (PCE) data, which will inform the Fed’s decision, along with a busy schedule of central bank meetings. With all these key signals pending, investors are preferring a more cautious stance rather than taking on risk at this stage.”
Demand in China has declined
Despite the decline in the benchmark regional index, Asian technology and semiconductor stocks rose, following their US counterparts, after Marvell Technology's comments on its data center unit's revenue forecasts following the release of financial results added further optimism towards trading in artificial intelligence stocks.
Meanwhile, an index of Chinese stocks listed in Hong Kong fell by more than 1% after a private survey showed that China's services activity expanded at its slowest pace in five months in November, providing further signs of weakening consumer demand.
The Indian rupee weakened as sentiment remained dampened by the delay in reaching a crucial trade agreement with the United States and the central bank's perceived lack of strong intervention in recent weeks, along with outflows of foreign investment from equities, according to analysts. Traders are now awaiting the Reserve Bank of India's monetary policy decision on December 5, looking for comments from Governor Sanjay Malhotra regarding the local currency.
Meanwhile, silver prices surged to a record high as traders speculated on continued supply shortages and lower borrowing costs in the United States, and gold also rose. West Texas Intermediate crude oil prices were little changed as traders assessed the prospects for ending the war in Ukraine following high-level talks between the United States and Russia, while attacks on Russian energy assets continued.
