Meanwhile, Australia’s ASX 200 Index bucked the broader market trend, rising 0.74% on Wednesday morning. Australian inflation data raised expectations for an RBA rate cut in February, boosting demand for rate-sensitive stocks. Australia’s annual underlying inflation fell to 3.2% in November from 3.5% in October.
Banking, gold and mining stocks contributed to gains, while the technology sector capped upside potential.
Key drivers included Commonwealth Bank of Australia (CBA), which rose 1.64%, while National Australia Bank (NAB) rose 1.80%. Lower interest rates can stimulate demand for credit and thus support profits.
Bets on an RBA rate cut in February also boosted demand for capital-intensive mining companies, with BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) made a profit.
Outlook
Asian markets face a pivotal period as global economic and policy factors evolve:
- US-China Relations: Escalating tariffs could depress Chinese exports and ripple through regional economies like Australia.
- US labor market data: Continued strength could put pressure on price-sensitive sectors.
- The Chinese stimulus measures: Supporting domestic demand can counterbalance weaker global trade.
As risks from trade tensions and monetary policy shifts persist, market sentiment remains fragile. Discover here how these developments can affect your portfolio.