Asia-Pacific markets slipped on Monday as trading began for December, with investors awaiting fresh manufacturing data from China and growing increasingly confident that the United States Federal Reserve will cut rates later this month.
Traders are now pricing in an 87.4% chance of a 25-basis-point cut at the Fed’s 10 December meeting, according to the CME Group FedWatch Tool.
Investors across the region are focused on the November manufacturing purchasing managers' index (PMI) from RatingDog, a private gauge that tracks mainly export-oriented Chinese firms.
China’s manufacturing sector fell to 49.9 according to the data. Production growth came to a standstill as new orders nearly stalled in November, despite a renewed rise in overseas demand. In response to softer new business, manufacturers cut staffing and purchasing levels and remained cautious with inventories.
However, business confidence improved compared with October.
The release follows official data published on Sunday showing that China’s factory activity improved slightly in November but remained in contraction for an eighth straight month.
Services activity also softened as the boost from earlier holiday travel faded.
By 11:55 am AEDT (12:55 am GMT), Australia’s S&P/ASX 200 was down 0.1%, Japan’s Nikkei 225 had dropped 1.3%, and South Korea’s Kospi 200 slid 0.8%.
Among regional data releases, Japanese capital spending rose 2.9% in the July–September quarter, slowing sharply from 7.6% in the previous period and missing expectations of a 5.9% increase.
In Australia, the Australian Bureau of Statistics (ABS) reported a 0.98% decline in quarterly business inventories, while company gross profits were unchanged.
South Korea continued to show strong export momentum, with outbound shipments up 8.4% year-on-year in November to US$61.04 billion, a record for that month.
Imports rose 1.2% to US$51.3 billion, resulting in a trade surplus of US$9.73 billion.
In the United States on Friday, the Dow rose 0.6%, the S&P 500 gained 0.5%, and the Nasdaq Composite climbed 0.7%.
Commodities were mixed. Brent crude slipped 0.8% to US$62.38 per barrel, while spot gold jumped 1.4% to US$4,215.82 per ounce.
Chinese equities edged higher on Friday, with the Shanghai Composite up 0.3% to 3,888.6 and the CSI 300 also adding 0.3% to 4,526.7.
Hong Kong’s Hang Seng Index eased 0.3% to 25,858.9, while India’s BSE Sensex closed flat near record levels at 85,706.7.
European markets also ended the week modestly higher. The FTSE 100 rose 0.3% to 9,720.5, the DAX gained 0.3% to 23,836.8, and France’s CAC 40 added 0.3% to finish at 8,122.7.
