Asia stocks drop tracking Wall St, S. Korean shares slump amid political crisis
Investing.com– Most Asian stocks fell on Friday ahead of key U.S. jobs data, mirroring overnight losses on Wall Street, while South Korean shares plunged amid an ongoing political crisis.
All three major U.S. stock indexes ended lower on Thursday, after hitting record high close in the precious session. U.S. Index futures were slightly lower in Asia hours on Friday.
Focus was on key U.S. nonfarm payrolls data, due later in the day, for more clarity on the interest rates outlook. The Federal Reserve is widely expected to cut interest rates in December, but its long-term plans for easing are uncertain.
S.Korean shares pressured by political jitters
South Korea’s KOSPI index slumped as much as 1.6% on Friday, after dropping nearly 1% in the previous session. The index saw increased volatility and sharp falls this week after country’s President Yoon Suk-Yeol abruptly revoked an imposition of martial law on Wednesday amid public and political backlash.
The leader of South Korea’s ruling party Han Dong-hoon said on Friday that the president must be removed from power to protect the nation, citing the attempt to impose martial law.
Other regional markets, including the Philippine’s PSEi Composite, and Singapore’s FTSE Straits Times Singapore index dropped 0.5% and 0.4%, respectively.
Japan’s Nikkei 225 fell 0.9%, and TOPIX declined 0.7%, while Malaysia’s FTSE Malaysia KLCI index and Australia’s S&P/ASX 200 were down 0.3% and 0.5%, respectively.
In contrast, Chinese stocks surged ahead on stimulus hopes ahead of a key Chinese economic meeting next week. The Shanghai Composite index jumped 0.9%, while the Shanghai Shenzhen CSI 300 index climbed 1.1%. Hong Kong’s Hang Seng index surged 1.2%.
RBI rate decision in focus
Nifty 50 Futures indicated that Nifty 50 will open slightly lower. Investors were cautious ahead of the Reserve Bank of India interest rate decision, due later in the day.
Markets are widely expecting the central bank to leave its key repo rate unchanged at 6.50% as country’s recent inflation print in October surged past the central bank’s tolerance ceiling of 6%.
However, some market participants are still anticipating a 25 basis points cut on India’s recent economic growth reading, which slumped to a seven-quarter low in the September quarter. The bets for a cut are also stemming from a depreciation in the Indian rupee.
“India is likely to remain the fastest-growing country in the region in 2025, although that growth will be weaker than in 2024. Inflation should remain well within the central bank’s target, and the local currency should outperform” ING analysts wrote in a recent note.
Asian markets brace for China data deluge next week
Focus next week will be squarely on China’s annual Central Economic Work Conference (CEWC) for more cues on stimulus measures and the outlook for Asia’s largest economy.
China is also set to release its November CPI inflation data on Tuesday, and its trade data on Wednesday.
India will release its CPI inflation for November next week, while the Reserve Bank of Australia will decide on its interest rates on Tuesday.