Cityscape of skyscrapers at dusk as seen from Victoria Peak in Hong Kong, China, July 23, 2023.
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Asia-Pacific markets were mixed on Tuesday, with mixed gains on Wall Street as investors focused on the US Federal Reserve’s decision on the US side.
Australia’s S&P/ASX 200 closed 0.78% higher at 8,314.
Japanese Nikkei Stock Average Topix fell 0.24% and 0.37% to close at 39,364.68 and 2,728.2, respectively. Korean Kospi fell 1.29% to close at 2,456.81, and KOSDAQ fell 0.58% to close at 694.47.
Reuters reported on Tuesday that Chinese leaders have decided to raise the budget deficit to 4% of GDP in 2025 to maintain economic growth at around 5% next year. China’s CSI300 index closed 0.26% lower at 3,922.03, while Hong Kong’s Hang Seng Index also closed 0.16% lower.
Gary Ng, senior economist at Natixis, said the increase in China’s major budget deficit signals the government’s intention to tighten fiscal policy, but the market remains unconvinced by its exact size.
“These increases could include debt exchanges with local government financial instruments, meaning the exact amount of new capital injected into the economy may appear to be less than it appears on the surface.” Ng told CNBC. “Therefore, the impact on growth may also be muted.”
Overnight in the US, the Nasdaq Composite hit a new all-time high as tech stocks rose. The tech stock ratio rose 1.24% to 20,173.89, while the S&P 500 index rose 0.38% to close at 6,074.08. The Dow Jones Industrial Average underperformed, dropping 110.58 points, or 0.25%, to end at 43,717.48. The Dow Jones Industrial Average (30 stocks) fell for eight days, marking its longest decline since 2018.
The US Federal Reserve’s decision on December 18th is also a top concern for investors, with the CME FedWatch tool currently predicting a 98.2% chance of a 25 basis point (bp) rate cut. .
Contrary to the general uptrend, the market darling NvidiaThe artificial intelligence chipmaker, which has driven stock gains over the past two years, fell 1.7%. The decline has sent the stock into correction territory, down more than 10% from its recent high in November.
—CNBC’s Brian Evans and Jesse Pound contributed to this report.
