Asian equities faced a decline on Wednesday, reflecting concerns over China’s economic performance as investors prepare for a closely contested U.S. election, which could significantly impact the global economy. Despite efforts by Beijing to bolster growth, market sentiment remained cautious.
Gold surged to an all-time high amid anxieties surrounding the U.S. presidential race, while Bitcoin approached its record peak as speculation mounted over a potential victory by Republican candidate Donald Trump.
The MSCI Asia-Pacific index, excluding Japan, dipped 0.22% in early trading, influenced by a downturn in Chinese markets. The CSI300 index of blue-chip stocks fell by 0.16%, and Hong Kong’s Hang Seng Index experienced a sharper decline of 0.64%.
These market movements occurred even as reports emerged that China is considering approving over 10 trillion yuan ($1.4 trillion) in additional debt issuance to stimulate its sluggish economy in the coming years. Saxo’s chief investment strategist, Charu Chanana, noted, “China’s latest stimulus package seems inadequate, with a significant portion directed towards local government debt relief. Although there’s a push to support the property sector, there’s limited urgency to address broader structural challenges such as debt, deflation, and demographics.”
The new energy vehicles index in China saw a slight increase of 0.2%, remaining resilient despite the European Union’s decision to impose tariffs of up to 45.3% on Chinese-made electric vehicles.
In the U.S., stock futures showed a modest uptick, bolstered by a strong earnings report from Alphabet, the parent company of Google, which exceeded revenue expectations. Nasdaq futures rose by 0.42%, and S&P 500 futures climbed 0.36%. Investors are keenly awaiting earnings reports from Meta Platforms, Microsoft, Apple, and Amazon over the coming days, hoping for sustained momentum in technology and artificial intelligence sectors that have driven market highs this year.
Meanwhile, Japan’s Nikkei index advanced nearly 1%, benefiting from a weaker yen.
Bitcoin hovered close to its record of $73,803.25, trading at $72,322.08 and set to gain 13% for the month. The cryptocurrency’s strength is attributed to the increasing likelihood of Trump’s return to office, which could lead to a more favorable environment for digital assets. Digital assets analyst Manuel Villegas from Julius Baer commented, “Bitcoin’s resilience is likely to continue if Republican prospects remain strong, whereas a Democratic sweep could trigger a broad sell-off.”
On the economic front, investors are preparing for a series of U.S. economic data releases this week that could influence Federal Reserve policy. The ADP National Employment Report and advance third-quarter GDP estimates are due later today, followed by nonfarm payroll figures on Friday. Recent data indicated that U.S. job openings have dropped to a three-and-a-half-year low in September, although a separate survey revealed a rise in consumer confidence to a nine-month high in October.
Khoon Goh, head of Asia research at ANZ, emphasized the importance of upcoming U.S. data, stating, “This week’s data is critical, particularly regarding long-term yields and the dollar’s impact.”
The dollar remained close to a three-month high against a basket of currencies, although its recent rally paused, giving some relief to the British pound, which stabilized above the $1.30 mark. The Japanese yen lingered near a three-month low due to the ruling coalition’s loss of a parliamentary majority in recent elections. The Australian dollar was relatively stable following domestic inflation data, rising 0.15% to $0.6570.
In commodity markets, Brent crude futures increased by 0.42% to $71.42 per barrel, while U.S. West Texas Intermediate crude futures rose 0.45% to $67.51 per barrel. Spot gold was last seen at $2,779.81 per ounce, up 0.18%, after peaking earlier in the session at $2,781.69.
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