Asia-Pacific markets trade mixed as investors look toward Fed decision

Asia-Pacific markets were mixed Tuesday, tracking mixed gains on Wall Street as investors look toward the U.S. Federal Reserve’s decision stateside. Australia’s S&P/ASX 200 traded 0.78% higher to close at 8,314. Japan’s Nikkei 225 and Topix fell 0.24% and 0.37% to close at 39,364.68 and 2,728.2 respectively. South Korea’s Kospi slipped 1.29% to close at 2,456.81, while the Kosdaq dropped 0.58% to end the trading day at 694.47. Chinese leaders have decided to increase the country’s budget deficit to 4% of GDP in 2025 in a bid to keep economic growth at around 5% next year, Reuters reported Tuesday. China’s CSI 300 traded 0.26% lower to close at 3,922.03, while Hong Kong’s Hang Seng Index traded 0.16% lower. The increase in China’s headline budget deficit is a reflection that the government is willing to step up fiscal policies, but the market remains unconvinced of the exact magnitude, said Gary Ng, senior economist at Natixis. “Such increase may include the debt swaps with local government financial vehicles, meaning the exact amount of fresh money injection into the economy may look lower than on the surface,” Ng told CNBC. “Therefore, the impact on growth may also be restrained,” he said. Overnight in the U.S., the Nasdaq Composite advanced to a record, lifted by a rally in tech. The tech-heavy index gained 1.24% to 20,173.89, while the S&P 500 added 0.38%, closing at 6,074.08. The Dow Jones Industrial Average underperformed, losing 110.58 points, or 0.25%, to end at 43,717.48. The 30-stock Dow fell for an eighth day, marking its longest run of losses since 2018. The Fed decision on Dec. 18 stateside will also be top of mind for investors, with the CME Fedwatch tool currently forecasting a 98.2% chance of a 25-basis-points cut. Contrary to the general upward trend, market darling Nvidia, the artificial intelligence chipmaker that had driven stock gains over the past two years, saw a 1.7% decline. This drop pushed the stock into correction territory, falling over 10% from its recent all-time high in November.