Asian markets slide as c. bank decisions, geopolitical uncertainty loom

Asian shares dipped on Monday, led by a 2.4 per cent decline in South Korean stocks amid political uncertainty surrounding President Yoon Suk Yeol. This comes ahead of a pivotal week for global central banks, with markets widely expecting interest rate cuts across major economies.

Chinese data showed consumer prices dropped by 0.6 per cent in November, dragging annual inflation to 0.2 per cent and amplifying calls for more policy stimulus. Meanwhile, China’s Central Economic Work Conference this week is expected to outline the country’s 2025 economic strategy, though immediate policy announcements remain uncertain.
Japan’s Nikkei gained 0.2 per cent on an upward revision to GDP growth, while Chinese blue-chip shares fell 0.5 per cent. In contrast, geopolitical tensions and Middle Eastern instability weighed on broader market sentiment.

US markets are poised for a key inflation report on Wednesday, which could reinforce expectations for a Federal Reserve rate cut at its Dec. 17–18 meeting. Futures suggest an 85 per cent likelihood of a quarter-point reduction, bolstered by last week’s employment data.

In currency markets, the dollar gained 0.8 per cent on the South Korean won, reaching 1,435.53. Gold edged up 0.2 per cent to $2,637 an ounce, while oil prices rose slightly, with Brent at $71.41 a barrel.

This week, central banks in Canada, the Eurozone, and Switzerland are expected to ease rates, while Australia and Brazil diverge with contrasting monetary moves. European Central Bank and Swiss National Bank decisions on Thursday are particularly anticipated, with the former likely to cut rates by 25 basis points.

Attribution: Reuters

Subediting: M. S. Salama