Asian Stocks Mixed As Data Backs Fed's Cautious Stance

Stocks in the Asia-Pacific region traded mixed on Thursday taking overnight cues from Wall Street after multiple data showed that the Federal Reserve will not rush to cut rates. Heavyweight technology stocks weighed on Wall Street.

Equity benchmarks in Japan fell while South Korea's was marginally lower during the session's opening. The Nikkei was 112 points, or 0.29%, lower at 38,002, while the S&P ASX 200 was up 44 points, or 0.53%, at 8,451 as of 5:42 a.m.

The US economy expanded at a solid pace in the third quarter driven by a broad-based advance in consumer spending. Gross domestic product increased at a 2.8% annualised pace in the third quarter, meeting estimates. This comes after the Fed cut interest rates in the last two FOMC meets to engineer a soft landing.

In another set of data, the Fed’s preferred measure of underlying inflation picked up even when it was in line with estimates. The US core personal consumption expenditures climbed 2.8% from October last year.

These two latest data points will allow the Fed to hold its rates until inflation is completely below its threshold. However, some economists are concerned that President-elect Donald Trump’s fiscal plans will put upward pressure on inflation.

Meanwhile, the yen rose to its strongest level since late October after climbing more than 1% against the greenback on Wednesday. The dollar index, which tracks the US dollar's performance against a basket of 10 leading global currencies, was trading slightly above the 106 mark on Thursday.

The Bank of Korea will announce on its key interest rate decision during the day which is expected to hold steady at 3.25%, according to Bloomberg.

US stocks paused their record rally as giant technology companies dragged down the benchmark indices. Dell Technologies Inc. and HP Inc. slumped over 11% after their third-quarter results disappointed investors. Further, US Federal Trade Commission opened an antitrust investigation against Microsoft Corp., leading to a fall in its scrip.

The US 10-year Treasury yield fell to 4.26%. The Wall Street will remain closed on Friday on account of Thanksgiving Day.

Crude oil prices remained steady a day after Israel reached a cease-fire deal with the Lebanese militant group Hezbollah. However, the drop in prices was weighed by signs of further delay in restoring output by the OPEC+.

The Brent crude was trading 0.03% higher at $72.83 a barrel as of 6:00 a.m. IST, and the West Texas Intermediate was up 0.12% at $68.80.