Asian stock markets fell on Monday as investors remained cautious ahead of the U.S. Federal Reserve’s upcoming interest rate decision. Chinese shares dropped sharply due to weaker-than-expected retail sales data, raising concerns about the strength of the world’s second-largest economy.
The Federal Reserve is expected to cut its benchmark interest rate by 25 basis points on Wednesday. However, uncertainty about its long-term monetary policy persists as inflation continues to be a key challenge. U.S. stock index futures were muted during Asian trading hours, reflecting the cautious sentiment ahead of the Fed’s meeting.
In China, the Shanghai Composite slipped by 0.1%, while the CSI 300 index declined by 0.4%. Hong Kong’s Hang Seng Index fell by 0.8%. Although industrial production data showed steady growth, retail sales figures for November fell short of expectations, highlighting ongoing consumer weakness and fueling fears of an uneven economic recovery.
Japan’s Nikkei 225 showed little movement, and the broader TOPIX index edged slightly lower ahead of the Bank of Japan’s policy meeting this week. The central bank is expected to maintain its current interest rates, taking more time to assess global risks and domestic wage growth trends. Meanwhile, data revealed that Japan’s factory activity contracted for the sixth consecutive month, while the services sector showed continued growth.
In South Korea, the KOSPI index remained steady despite political uncertainty following President Yoon Suk Yeol’s impeachment by the opposition-led parliament over attempts to impose martial law. The country’s finance ministry assured swift action to stabilize markets and support the economy amid the unrest.
Elsewhere in the region, Australia’s S&P/ASX 200 fell by 0.3%, and Indonesia’s Jakarta Composite Index declined by 0.9%. In contrast, India showed a more optimistic outlook, with Nifty 50 futures signaling a positive opening, while Malaysia’s FTSE KLCI index rose by 0.2%.
Globally, investor sentiment remained cautious as the Federal Reserve’s decision looms. While the anticipated rate cut is widely expected, last week’s inflation data has cast doubts on the central bank’s long-term approach, leaving markets in a holding pattern.
