Global Factors influencing ASX stocks on 18 December 2023

On 18 December 2023, at AEDT 11:50 AM, the benchmark index S&P/ASX 200 is trading lower today, declining 0.50 points or 0.01%, and is currently trading at 7,442.20 levels. Out of 11 sectors, 7 are trading lower along with the S&P/ASX 200. The A-REIT and Consumer Staples sectors were the top 2 declining sectors, down by 1.05% and 0.48% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 0.07%; Dragged Down By A-REIT And Consumer Staples Sectors

On that note, let us look at a few global reasons impacting the stock market today:

1. Some of the key U.S. indices ended mixed in their previous session. NASDAQ Composite, Dow jones, NASDAQ-100 ended higher by 0.35%, 0.15%, 0.52%, while S&P 500 ended lower by 0.01% respectively.

2. On Monday, Asian stocks commenced the week cautiously amid anticipation of potential shifts in Japan's central bank policies and key U.S. inflation data that could impact interest rate expectations. The Bank of Japan (BOJ) is set to convene on Tuesday, sparking speculation about a move away from its current ultra-loose policies, including negative interest rates. While analysts surveyed by Reuters do not anticipate an immediate change, there is speculation that policymakers may begin outlining the groundwork for a future shift. The market's focus is also on upcoming U.S. inflation data, which is expected to influence perceptions of potential interest rate cuts. The week unfolds against a backdrop of heightened attention to central bank decisions and economic indicators.

3. According to the Central Finance Office of China, state media reports that the country's economy in 2024 is poised for more opportunities than challenges. Favourable conditions are emphasized as being stronger than unfavorable factors. The macroeconomic policies are expected to persist in offering support for economic recovery. A detailed summary of the annual Central Economic Work Conference, conducted from December 11-12, highlights the commitment of top leaders to establishing economic targets for the upcoming year. The announcement reflects a positive outlook on China's economic landscape, with an emphasis on the ongoing support and policies geared towards fostering recovery and growth in the world's second-largest economy.

4. Chinese semiconductor design companies are turning to Malaysian firms for assembling high-end chips, such as graphics processing units (GPUs), to hedge against potential U.S. sanctions on China's chip industry. This move reflects a strategy to diversify manufacturing and reduce vulnerability to geopolitical risks impacting the semiconductor sector.

5. The Hang Seng is up by 2.38% and FTSE 100 is down by 0.95%.

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