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Asian stocks follow Wall Street down

Both US and Asian stocks fell as investors questioned the validity of the narrative dominating sentiment in recent weeks - that the Federal Reserve and European Central Bank have ended their interest rate hiking cycles. Gold fell quickly from a new all-time high to start the new week but stabilized on Tuesday around USD 2030 per ounce.

Shane Strowmatt, LGT
Reading time
5 minutes
Falling market
© Shutterstock

In the Asia-Pacific region, stock markets were down across the board as traders digested a several key macroeconomic data releases out of the region. The Core Consumer Price Index in Tokyo, which is considered to a leading indicator for national inflation, rose by 2.3% in November and was approaching the Bank of Japan’s 2% target. The reading was lower than market expectations. The Nikkei 225 lost 1.3% on Tuesday. In South Korea, inflation also came in lower than market consensus with data released on Tuesday for November showing prices increases of 3.3% on the year. The Kospi was trading 0.8% lower. In Australia, the S&P/ASX 200 finished Tuesday’s session down 0.9% after the Reserve Bank of Australia kept interest rates unchanged at a 12-year high as expected by market participants. China’s Services Purchasing Managers’ Index rose to 51.5 in November, despite official data from last week showing a value below 50, which would signal contraction. Hong Kong's Hang Seng Index lost 2.4%, while the Shanghai Composite was down 1.6%.

In New York, equity trading was dominated by profit taking to start the week following a strong rally in November. Particularly tech stocks were affected with the Nasdaq-100 falling 1% on Monday. The Dow Jones Industrial lost 0.1% and the S&P 500 was down 0.5%.

In Europe, most markets were down but Switzerland’s SMI saw a gain of 0.6% to start the week, supported by Roche, which jumped 2.8% on Monday. The Swiss pharmaceuticals company offered to purchase Carmot Therapeutics, which makes multiple weight-loss medicines, for USD 2.7 billion. The market for obesity medicines has exploded recently and is expected to continue to expand rapidly in the coming years.

In Switzerland, consumer prices fell 0.2% in November when compared to October and increased 1.4% when compared to the same month of the previous year. The Core Consumer Price Index, which ignores volatile food and energy prices, increased 1.4% on the year, a slower pace than the 1.5% of the previous month. While domestic products were 2.1% more expensive, imported products put a break on total inflation by falling 0.6% in November when compared to November of 2022. Inflation in Switzerland has been below the Swiss National Bank’s 2% target for several months in a row. The SNB kept rates unchanged at its last policy meeting and is expected to do the same next week at its last monetary policy meeting of the year.

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Services Purchasing Managers’ Indices from several countries throughout the day, including Spain (09:15 CET), Italy (09:45), France (09:50), Germany (09:55), euro area (10:00), US (15:45), US ISM (16:00); euro area producer prices (11:00); US JOLTS jobs report (16:00).


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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