Stock markets across the Asia-Pacific region traded mostly higher on Wednesday, taking their cue from a fresh record close on Wall Street. The rally followed an unexpectedly robust report on the health of the United States economy.
Wall Street Leads the Way
The catalyst for the positive sentiment was a strong performance from US benchmarks on Tuesday. The S&P 500 index rose 0.5% to close at a record 6,909.79, powered by significant gains in the technology sector. The Dow Jones Industrial Average added 0.2% to 48,442.41, while the Nasdaq composite climbed 0.6% to 23,561.84.
This surge came after data showed the US economy expanded at an annualised rate of 4.3% in the third quarter (July to September), surpassing many analysts' expectations. This marked an acceleration from the 3.8% growth recorded in the second quarter.
Mixed Picture in Asian Trading
In response, trading floors in Asia saw cautious gains. However, activity was subdued with many global markets, including those in the US, preparing to close for the Christmas holiday.
Hong Kong's Hang Seng index gained 0.2% to 25,818.93, while the Shanghai Composite in mainland China also edged up 0.2% to 3,929.25. Taiwan's Taiex and India's Sensex both posted minor gains of less than 0.1%.
Other markets were less buoyant. Tokyo's Nikkei 225 was flat at 50,411.10, and South Korea's Kospi slipped 0.1%. Australia's S&P/ASX 200 fell nearly 0.4% to 8,762.70. Markets in Hong Kong and Australia closed early for Christmas Eve.
Inflation Concerns and Commodity Moves
The US growth data presented a mixed picture, as it was accompanied by persistent inflation. The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) index, climbed to a 2.8% annual pace in the third quarter, up from 2.1% in the previous quarter.
Meanwhile, safe-haven assets continued their rally. The price of gold rose 0.4% early Wednesday to $4,525.50 per ounce, adding to its remarkable yearly gains of approximately 70%. Silver jumped 1.8%, extending its rally driven by heightened geopolitical tensions.
In currency markets, the US dollar continued to weaken against the Japanese yen, trading at 155.96 yen. Oil prices edged higher as traders monitored potential supply disruptions, with US benchmark crude adding 7 cents to $58.45 a barrel.
Investors are now looking ahead to key data, including weekly US jobless claims, and betting that the Federal Reserve will hold interest rates steady at its January meeting amid signs of a slowing labour market and weaker retail sales.
