South Korean stocks dropped sharply as Asian market challenges, falling 1.4% on Monday. This decline came amid political instability surrounding President Yoon Suk Yeol. Authorities have promised all-out efforts to stabilize the financial markets. However, investor sentiment remains cautious, reflecting broader uncertainties in the region.
In China, disinflationary pressure continues to grow. The consumer price index dropped by a significant 0.6% in November. Annual inflation has now reached a minimal 0.2%, signaling weak economic momentum. Policymakers are expected to discuss potential economic strategies at the Central Economic Work Conference this week. Nevertheless, it is unclear if any substantial policy measures will be introduced.
Despite challenges in Asia, the global economic outlook shows signs of resilience. U.S. payroll data for November provided a modest boost to market confidence. The recovery has been sufficient to quell fears of a severe economic slowdown. Importantly, it does not appear strong enough to delay a Federal Reserve rate cut expected next week.
Markets are now closely watching the upcoming U.S. consumer price report. Analysts expect the core inflation rate to hold steady at 3.3% for November. Futures markets indicate an 85% chance of a quarter-point rate cut at the Federal Reserve meeting on December 17-18.
Asian-Pacific shares showed varied performance on Monday. Japan’s Nikkei rose 0.3%, supported by improved economic growth figures. Meanwhile, Chinese blue-chip stocks remained mostly flat, reflecting investor uncertainty. South Korea’s slump weighed heavily on the MSCI Asia-Pacific index, which edged down 0.2%.
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