Asian Shares Mixed: Nasdaq Sets Record Ahead of Fed Meeting

Asian markets kicked off the day with a mixed performance, following the Nasdaq's record-setting rally and ahead of the Federal Reserve's crucial meeting this week. The Fed's decision on interest rates and economic projections will likely set the direction for markets in the new year.



China's economic woes continued to weigh on regional markets, with disappointing data and lackluster policy announcements pressuring policymakers to intensify stimulus measures. Chinese exports grew at a slower pace, while imports posted an unexpected decline in November, signaling growing trade challenges. The Shanghai Composite Index and Hong Kong's Hang Seng Index both ended the day in the red.

Meanwhile, Japanese markets eked out modest gains, boosted by a weaker yen and signals of a policy shift in China. The Nikkei 225 Index rose 0.5%, while the broader Topix Index ended 0.3% higher. Chinese-exposed stocks such as Fanuc, Yaskawa Electric, and Shiseido surged 3-4% on the news.

South Korean stocks recovered from one-year lows, as policymakers affirmed their intention to stabilize markets and financial authorities addressed excessive volatility. The Kospi jumped 2.4%, with tech heavyweight Samsung Electronics and automaker Hyundai Motor leading the gains.

Australian stocks closed lower after the Reserve Bank of Australia kept interest rates on hold, as widely expected, with a dovish tilt. The benchmark S&P/ASX 200 Index dipped 0.4%, while the broader All Ordinaries Index ended down 0.4%. Technology stocks and banks declined, offsetting gains in the mining and energy sectors.



Investors are now focusing on the Fed's meeting this week, with expectations for a series of cuts to rates by the central bank one of the main reasons the S&P 500 has set an all-time high 57 times so far this year. The economy has held up better than many feared, continuing to grow even after the Fed hiked the federal funds rate to a two-decade high in hopes of grinding down on inflation, which topped 9% two summers ago.

The Fed is widely expected to cut its main rate for a third straight time, as it tries to boost the slowing job market after getting inflation nearly all the way down to its target of 2%. The question is how much more it will cut rates next year, and Fed officials will release projections for where they see the federal funds rate ending 2025, along with other economic indicators, once their meeting concludes.

Fed Chair Jerome Powell will also answer questions in a press conference following the meeting, providing valuable insights into the central bank's outlook for the economy and monetary policy. Investors will be closely watching Powell's remarks for any hints about future rate cuts and the economic outlook.

In conclusion, Asian markets are mixed ahead of the Fed's crucial meeting this week, with China's economic woes and trade dynamics weighing on regional markets. The Fed's decision on interest rates and economic projections will likely set the direction for markets in the new year, as investors await Powell's remarks for guidance on future rate cuts and the economic outlook.