China leads declines among Asia markets as investors await Fed rate decision

China stocks led declines among Asia-Pacific markets Wednesday as investors digested Beijing’s plan to boost domestic demand, ahead of the interest rate decision from the U.S. Federal Reserve. The mainland Chinese CSI 300 index shed 1.67% on Wednesday, closing at 3,369.6 and hitting fresh four-year lows. It comes a day after China’s leaders vowed to boost domestic demand, prioritize the development of strategic sectors and tackle the country’s real estate crisis, following a key meeting that laid out economic priorities for 2024. The measures stated by Beijing were largely in-line with market expectations, according to BofA Global Research. “We do not expect a policy ‘bazooka’ package featuring aggressive fiscal expansion or rate cuts to be released.” The Bank of Japan’s Tankan quarterly survey, which measures economic conditions in Japan, showed business confidence at big manufacturers improved more than expected in the fourth quarter, with the index climbing to +12 from +10. Meanwhile, the index for big non-manufacturers’ sentiment rose to +30 from +27, improving for the seventh quarter in a row. A positive index reading indicates optimistic respondents outnumber pessimistic ones. Later in the day, the Fed is expected to release its policy statement and will likely hold its benchmark overnight borrowing rate in a range between 5.25%-5.5%. In Australia, the S&P/ASX 200 climbed 0.31% and closed at 7,257.8, extending its four-month highs. Japan’s Nikkei 225 advanced 0.25% to close at 32,926.35, while the Topix was unchanged at 2,354.92. In contrast, South Korea’s Kospi fell 0.97% to close at 2,510.66 and the small-cap Kosdaq slid 1.22% to 829.31. Hong Kong’s Hang Seng index fell 0.94% in its final hour, after leading gains in Asia on Tuesday. Overnight in the U.S., all three major indexes gained ground for a fourth straight day as U.S. inflation came in as expected, with the consumer price index rising 3.1% year-on-year. The tech-heavy Nasdaq Composite and Dow Jones Industrial Average touched their highest intraday levels since April and January of last year, respectively. The S&P 500 added 0.46%, while the Dow gained 0.48%. Meanwhile, the Nasdaq Composite advanced 0.70%.