A Major League Baseball (MLB) store in the Myeongdong shopping district of Seoul, South Korea, was photographed on Saturday, March 9, 2024. The image was captured and shared by Bloomberg | Getty Images.
In Singapore, the Hang Seng Index in Hong Kong experienced a surge of over 6% on Wednesday. This increase came after a break for a public holiday on Tuesday and is attributed to optimism about Beijing’s recent stimulus policies.
The gains were driven primarily by property developers, with China Vanke, Logan Group, and Longfor Group leading the way, rising over 40%, 32%, and 23%, respectively. Additionally, Chinese tech giants saw significant increases as well; Baidu and JD.com both grew by over 10%, while Alibaba, Tencent, and Xiaomi rose by over 5%.
Mainland Chinese markets were closed on Wednesday and will remain closed for the rest of the week due to the Golden Week holiday. Earlier, Chinese stocks rallied on Monday to their best performance in 16 years after Beijing announced various stimulus measures, including interest-rate cuts, reductions in bank reserve requirements, and increased liquidity for investors.
Overall, Asia-Pacific markets displayed mixed performance on Wednesday morning. This followed a poor start to the trading month on Wall Street, where major indexes fell amid rising tensions in the Middle East. Australia’s S&P/ASX 200 remained steady, South Korea’s Kospi decreased by 0.2% while the small-cap Kosdaq increased by 0.6%. Japan’s Nikkei 225 fell by 1.6%, and the Topix decreased by 0.8%.
On Tuesday, Japan saw a new Prime Minister, Shigeru Ishiba, take office following his election as the head of the country’s ruling Liberal Democratic Party. He succeeded Prime Minister Fumio Kishida, who stepped down earlier in the day. Ishiba’s new position could potentially allow the Bank of Japan more flexibility to further raise interest rates. However, newly appointed economy minister Ryosei Akazawa mentioned that Ishiba expects the central bank to carefully evaluate the economy before implementing more rate hikes.
In individual stocks, Mitsubishi Motors’ shares rose by 4.6% after reporting a 22.1% increase in year-to-date sales in North America compared to the previous year. Mitsubishi Electric also saw a 1% rise.
Traders in Asia were also examining consumer inflation data out of South Korea. The consumer price index for South Korea rose 1.6% in September from the previous year, which was lower than the 1.9% expected by economists polled by Reuters. On a monthly basis, the figure increased by 0.1%, less than the previous month’s 0.4% and the 0.3% predicted by economists. Additionally, a survey from S&P Global indicated that South Korea’s factory activity contracted at its fastest pace in 15 months in September due to slowed overseas demand for the first time this year.
Tensions in the Middle East impacted U.S. markets overnight. The Dow Jones Industrial Average fell by more than 173 points, while the S&P 500 and Nasdaq Composite dropped by 0.93% and 1.53%, respectively. Oil prices and the CBOE Volatility Index (VIX) jumped as Iran launched ballistic missiles at Israel. The attack occurred after Israel initiated a ground operation into Lebanon amidst increasing tensions with the Iran-backed militant group Hezbollah.
Israeli Prime Minister Benjamin Netanyahu declared the missile attacks a failure and promised retaliation, stating that Iran “made a big mistake” and will face consequences. Economist Stephen Roach, speaking to CNBC’s “Squawk Box Asia,” warned that the conflict in the Middle East could lead to increased oil prices and inflation, potentially prompting the U.S. Federal Reserve to reassess its accommodative monetary policy.
U.S. investors are also anticipating the release of the September jobs report on Friday, following the creation of fewer jobs than expected in August, indicating a slowing labor market.
“Should there be a regional conflict in the Middle East coinciding with rising unemployment in the United States, markets could experience significant volatility,” Roach added.
—CNBC’s Brian Evans and Alex Harring contributed to this report.
