Asian markets tread cautiously amid US rate cut uncertainty

Asian stock markets opened the week with a cautious stance on Monday as investors await the highly anticipated US Federal Reserve interest rate decision.

While a rate cut is widely expected, the magnitude of the reduction remains uncertain, dividing market sentiment.

Geopolitical tensions also added to the market’s jitters, as Republican presidential candidate Donald Trump was the target of a second assassination attempt on Sunday, according to the FBI.

Thin trading conditions prevailed in several Asian markets due to holidays in China, Japan, South Korea, and Indonesia.

MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat, following a 0.8 per cent gain last week. Japan’s Nikkei was closed, but futures traded slightly lower as recent yen gains weighed on exporters.

Economic data from China released over the weekend disappointed, with industrial output growth slowing to a five-month low in August and retail sales and new home prices weakening further.

“The data bolsters the case for additional economic stimulus by year-end if China wants to achieve its target of around 5 per cent growth in 2024,” said Vivek Dhar, a mining & energy analyst at CBA.

Oil prices increased as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Brent crude futures rose 19 cents to $71.78 per barrel, while West Texas Intermediate (WTI) crude futures gained 28 cents to $68.93 per barrel.

Attribution: Reuters

Subediting: M. S. Salama