Asian stocks fall following a strong November, with mixed signals from PMIs

With attention now shifting to an upcoming speech by Fed Chair Jerome Powell for additional clues on interest rates, the majority of Asian stocks saw a slight decline on Friday, reflecting some profit-taking following their impressive gains through November.

Since there was an unanticipated increase in Chinese manufacturing activity in November, sentiment was also largely restrained by China’s mixed economic signals. However, the reading was released the day after an analysis revealed ongoing weakness in the industry.

The indices for China and Hong Kong dropped 0.5% and 0.8%, respectively. When investors continued to be cautious about a potential slowdown in the country’s economy, the three had largely underperformed their Asian counterparts in November.

Other regions with significant trade exposure to China experienced losses in their stocks.

stocks  : Asian PMIs reveal ongoing weakness in manufacturing.

Australia’s fell 0.3% as manufacturing activity continued to decline, according to PMI data. Even so, the ASX 200 was holding onto its nearly 4% gain from November.

Following data that revealed a larger-than-expected decline in inflation, attention shifted to the central bank’s meeting that is scheduled for next week, when it is widely anticipated that interest rates will remain unchanged.

After rallying 10.6% in November, South Korea’s stock fell 0.9%, significantly outperforming its Asian counterparts. Through November, data that was made public on Friday also indicated some improvement in South Korea.

After recording an 8.5% increase in November, Japan’s markets moved sideways. The index continued to approach a 33-year high, but further gains were questionable given that data released on Friday indicated the manufacturing sector’s ongoing weakness.

The September quarter GDP growth of India exceeded expectations, according to data released on Thursday, and this led to positive opening prices for the country’s index. The Nifty was set up for more gains ahead of a meeting next week thanks to optimism over India’s economy, which is the largest economy growing at the fastest rate this year.

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With Powell in mind, the dollar rebound weighs

As data—the Federal Reserve’s preferred inflation gauge—showed some stickiness in inflation through October, profit-taking in regional markets also followed an overnight improvement in the dollar.

Only one day prior to Fed Chair Jerome Powell’s speech on Friday, the reading took place. Before the Fed announces its annual rate decision in mid-December, Powell is anticipated to provide additional clues about interest rates.

Notwithstanding, markets are also watching for any indications from the central bank about when it intends to start reducing interest rates in 2024. The central bank is generally expected to maintain interest rate stability.

An Asian stock rally through November was largely propelled by an easing of concerns about a hawkish Fed.