Asian stocks fall on Tuesday

Asian stocks fell on Tuesday as investors awaited a likely Federal Reserve rate cut this week, while the dollar held steady amid uncertainty over US interest rates next year.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.65 per cent. China’s CSI300 index dropped 0.47 per cent, and the CSI Semiconductor Index lost 0.5 per cent after the US approved exports of Nvidia’s second-tier AI chips to China with a 25 per cent fee.

The Reserve Bank of Australia held rates steady, signalling potential hikes if inflation persists, pushing the Australian dollar near a three-month high. Wall Street ended lower on Monday, with the Dow down 0.5 per cent, the S&P 500 off 0.35 per cent, and the Nasdaq slightly lower.

Investors are focused on the Fed’s next moves after the December cut, with some warning of internal divisions and a shallow easing cycle in 2026. Traders price in 77 basis points of rate cuts by year-end.

In currencies, the dollar was steady, the euro traded at $1.1649, sterling rose to $1.3336, and the Aussie climbed to $0.6646. The yen hovered around 155.91 per dollar after a 7.5-magnitude earthquake in northeastern Japan displaced 90,000 residents.

Oil prices extended losses on concerns over Russia-Ukraine peace talks, with Brent crude at $62.32 a barrel and US WTI at $58.64.

Attribution: Reuters