Asia, Oct 23, V7N- Asian equities displayed mixed performance on Wednesday, diverging after another uneventful day on Wall Street. Investors remain cautious due to rising bond yields and comments from Federal Reserve officials, which have tempered expectations of US interest rate cuts. The global rally, particularly in New York, appears to be losing momentum as traders assess the Fed's plans following stronger-than-expected economic data and a tight upcoming US presidential election.

The focus is also on China, with hopes for more stimulus measures to reignite growth after recent efforts, while geopolitical tensions, particularly in the Middle East, have driven gold prices to new highs as a safe-haven asset.

The likelihood of a 50-basis-point rate cut by the Fed has diminished due to strong US economic indicators and a resilient labor market. Some key Fed members have expressed caution about cutting rates too quickly. Additionally, markets are eyeing the possibility of a Donald Trump victory in the November election, which could lead to tax cuts and tariffs, potentially stoking inflation.

US Treasury yields have reached their highest levels since July. Investors are grappling with a complex landscape that includes geopolitical tensions in the Middle East, a less dovish Fed, and the potential impact of a "Trump Trade" on the bond market. These factors have created uncertainty in the markets, leading to a mixed performance in Asia.

Tokyo's Nikkei 225 closed down 0.8%, despite a weaker yen, while Hong Kong's Hang Seng Index climbed more than 1%, supported by China's recent economic support measures. Other Asian markets showed varied results, with Wellington, Manila, Jakarta, and Taipei falling, while Shanghai, Sydney, Seoul, Singapore, and Mumbai posted gains.

In the commodities market, gold reached a new record of $2,753.23, driven by uncertainty surrounding the US election and concerns over the Middle East conflict. Oil prices ticked down after a surge on Tuesday, following China's decision to lift import quotas on independent oil refineries, signaling potential economic recovery.

Key market figures as of 0710 GMT:

  • Tokyo - Nikkei 225: DOWN 0.8% at 38,104.86 (close)
  • Hong Kong - Hang Seng Index: UP 1.1% at 20,728.00
  • Shanghai - Composite: UP 0.5% at 3,302.80 (close)
  • London - FTSE 100: DOWN 0.1% at 8,301.74
  • Euro/dollar: DOWN at $1.0793 from $1.0800 on Tuesday
  • Pound/dollar: DOWN at $1.2970 from $1.2977
  • Dollar/yen: UP at 152.31 yen from 151.02 yen
  • Euro/pound: UP at 83.22 pence from 83.14 pence
  • West Texas Intermediate: DOWN 0.7% at $71.26 per barrel
  • Brent North Sea Crude: DOWN 0.6% at $75.56 per barrel
  • New York - Dow: FLAT at 42,924.89 (close)

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