Asia markets slide as CSI 300 hits fresh four year lows; Hong Kong stocks drop to over 1-year low

India’s service sector activity expanded at a slower pace than expected in November, according to S&P Global.

The country’s services purchasing managers index came in at 56.9, down from 58.4 in October and also lower than the 58.0 expected in a Reuters forecast. A reading above 50 indicates expansion, while one below 50 indicates contraction.

The November reading marks 28 straight months of expansion, but this was the lowest rate of increase since November 2022.

— Lim Hui Jie

Hong’s Kong’s private sector activity expanded for the first time since June, according to private surveys from S&P Global.

The city’s purchasing managers’ index rose to 50.1, just above the 50 mark. S&P said the rise was supported by improvements across both new business and activity gauges, which reflected only mild contractions.

However, there were some cost pressures.

Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said that “firms were limited in their ability to pass on rising costs in November as overall input prices rose at a quicker rate.”

“Companies appear to be caught between raising remunerations to hold onto staff and keeping prices low to retain customers,” she added.

— Lim Hui Jie

The Caixin China services purchasing managers’ index for November climbed to its highest in three months, diverging from China’s official PMI reading that showed a contraction.

This private survey reading came in at 51.5 in November, according to a release dated Dec. 5, rising from 50.4 in October and 50.2 in September.

China’s official non-manufacturing PMI services sub-index for November released last week came in at 49.3, showing a contraction for the first time since December 2022 .

— Clement Tan

Japan’s business activity contracted for the first time this year, according to the au Jibun Bank.

The country’s composite purchasing managers’ index reading for November came in at 49.6, down from the flash figure of 50.0 reported earlier last month. PMI below 50 indicates contraction, while above 50 indicates expansion.

Separately, Japan’s service sector activity softened to 50.8 in November, indicating the weakest growth since November 2022.

While services activity continued to grow, the growth rate was insufficient to offset a faster drop in manufacturing, au Jibun Bank said.

— Lim Hui Jie

The headline inflation rate in Japan’s capital city of Tokyo rose by 2.6% in November, its slowest rise since July 2022.

This comes after the capital city’s inflation rate spiked to 3.3% in October, after being largely on a downward trend from its peak in January. Tokyo’s inflation readings are largely considered to be a leading indicator of nationwide trends.

Core inflation, which strips out prices of fresh food, came in at 2.3%, lower than Reuters expectations of 2.4% and also down from 2.7% in October.

The so called “core-core” inflation rate, which strips out both fresh food and fuel prices and watched by the Bank of Japan fell slightly to 3.6%, down from 3.8% in October.

— Lim Hui Jie

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— Amala Balakrishner

South Korea’s inflation rate slowed to 3.3% for November, coming in below expectations and marking its first decline in three months of acceleration.

The November reading was forecast by a Reuters poll to moderate to 3.7%, down from 3.8% in October.

On a month on month basis, the consumer price index fell 0.6%, a steeper slide than the 0.15% expected by the Reuters poll.

— Lim Hui Jie

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— Ganesh Rao

Wharton professor Jeremy Siegel believes that it’s due time for the Federal Reserve to acknowledge the possibility of lowering rates come December’s meeting, he told CNBC’s “Squawk Box” on Monday morning.

He said the Fed was way too late to raise rates in the last hiking cycle, but hopes that the U.S. central bank will take more proactive measures this time around.

“That should be a part of the conversation given the softness of the data that we’ve honestly seen over the last four weeks,” he said. “They can’t be anywhere near as stubborn as they were on raising rates as they will have to be on lowering rates.”

Siegel clarified that he doesn’t believe a recession is inevitable. But cutting rates and increasing the money supply are the biggest chance for the Fed to realize the soft landing it desires, he added.

— Lisa Kailai Han

Defensive sectors, which lagged this year’s market rally, outperformed on Monday. In fact, consumer staples, health care and utilities were among the best S&P 500 sectors in the session, though they remain down on the year.

Among the consumer staples outperformers were Estee Lauder shares. The cosmetics stocks gained more than 4% in midday trading, even as it’s down more than 44% in 2023. Shares of J.M. Smucker and General Mills rose more than 1%, each.

Health care stocks such as IDEXX Laboratories and Illumina also outpaced the broader market, up 5% and 3%, respectively.

— Sarah Min

Oil prices continued to decline on Monday despite production cuts announced by OPEC and its allies.

The West Texas Intermediate contract for January fell $1.03, or 1.39%, to to settle at $73.04 a barrel, while the Brent crude contract for February dropped 85 cents, or 1.08%, to settle at $78.03 a barrel.

Oil futures have declined 6% since Wednesday’s close.

Several OPEC members and allied nations such as Russia, called OPEC+, announced last Thursday voluntary supply cuts of 2.2 million barrels per day for the first quarter of 2024.

But traders are skeptical that the group will actually deliver on the promised reductions, sending oil prices lower.

Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg Monday that the curbs could continue beyond the first quarter of 2024. Prince Abdulaziz said he is confident that members will deliver on the announced reductions.

— Spencer Kimball