Asian markets traded mostly lower on Wednesday as investors dialed back expectations for imminent Federal Reserve rate cuts after mixed US inflation data.
The cautious sentiment was also backed by the trade deal US President Donald Trump announced with Indonesia.
As per the agreement, the exporters from Indonesia will face 19% tariffs for their shipments to the United States. Indonesia is among the few countries that managed to strike a trade deal with the United States.
The dip in Asian markets came after Federal Reserve officials stressed the importance of keeping interest rates higher for longer to keep inflation in check.
That message dampened hopes for multiple rate cuts this year, with the odds of a September cut now just barely above 50%.
Nikkei 225 ends in red
Japanese stocks ended slightly lower on Wednesday, dragged down by weakness in the Paper & Pulp, Transport, and Communication sectors.
The Nikkei 225 edged down 0.07% by the close in Tokyo.
On the upside, Toho Co was the standout performer, soaring 10.91% to finish at 9,191yen. Asahi Group Holdings also posted solid gains, up 2.99% to 1,893.50 yen, while IHI Corp climbed 2.52% to end the day at 15,680 yen.
The Hang Seng Index fell 72 points, or 0.3%, to close at 24,518 on Wednesday, pulling back from a four-month high hit earlier in the session as investors took profits off the table.
The drop snapped a four-day winning streak, with sentiment taking a hit after US futures slipped.
June inflation data raised concerns that tariffs might be pushing prices higher, dampening hopes for potential rate cuts from the Federal Reserve.
Kospi drops 0.9%
South Korea’s KOSPI slipped 28.9 points, or 0.9%, to end at 3,186.38 on Wednesday, falling back below the 3,200 mark just three sessions after breaking above it for the first time in nearly four years.
The KOSDAQ also inched lower, dipping 0.65 points, or 0.08%, to close at 812.23.
The cautious market sentiment continued in other Asian markets like China, where the CSI 300 index remained flat throughout the day, only to end in red at 4,007.20, 0.30% lower.
Australia’s S&P/ASX 200 relayed the negative sentiment as it ended 0.80% lower on Wednesday at 8,561.80.
Sensex, Nifty bounce back
Indian equity benchmarks ended higher on Wednesday, bouncing back from early losses thanks to steady foreign inflows, easing market volatility, and strong demand for IT stocks.
The Sensex rose 63.57 points, or 0.07%, to close at 82,634.48, after briefly slipping to 82,342.94 earlier in the day. The Nifty added 16.25 points, or 0.06%, finishing at 25,212.05.
Among the day’s top gainers were Mahindra & Mahindra, Wipro, Nestle India, State Bank of India, and Tech Mahindra, with intraday gains of up to 3%.
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