China Slips Amid Stimulus Focus, South Korea Rises on BOK Rate Cut By Investing.com

Investing.com– Most Asian stocks were lower on Friday, with Chinese markets falling on further signs of fiscal stimulus, while South Korean shares rose after the Bank of Korea cut interest rates.

Broader markets were weakened as hotter-than-expected U.S. inflation data raised doubts about how much the Federal Reserve will cut interest rates in coming months.

Asian markets got a negative lead from Wall Street, which ended slightly lower on Thursday as inflation data fueled bets that the Fed will cut rates by a narrower margin in November.

U.S. stock index futures edged higher in Asian trade, with the focus squarely on the third-quarter earnings season.

Chinese stocks sink with fiscal stimulus in focus

Indexes and China fell between 1.5 percent and 2 percent, losing ground after a volatile session on Thursday, as investors awaited more clues on fiscal stimulus measures.

China’s Finance Ministry is due to hold a briefing on Saturday, where it will outline fiscal support for the economy. The announcement came after investors largely balked at Beijing’s latest round of monetary stimulus and called for tighter fiscal measures.

Analysts expect China to implement at least 2 trillion yuan ($283 billion) in fiscal measures, much of which is aimed at supporting private consumption.

Chinese stocks initially rose to two-year highs on optimism over more stimulus. But that rally has stalled in recent sessions as investors doubted how much room Beijing had to release more support.

One point of contention is China’s high level of debt, which could limit the scope of any fiscal stimulus. Beijing has so far remained largely conservative with its stimulus measures.

Hong Kong markets were closed for the holiday.

Doubts about China weighed on broader Asian markets. Australia fell 0.1 percent, while Japan and indices traded sideways.

India index futures pointed to a slightly positive open after the index avoided a sharp decline from record highs hit in the past week.

South Korean stocks rise as BOK cuts rates

South Korea added 0.3%, with local shares supported by an interest rate cut by the BOK.

BOK to 3.25% and signaled a shift from its restrictive stance as local economic growth cooled and inflation eased.

The cut was the BOK’s first interest rate cut in more than four years and came as the central bank was now looking to shore up slowing growth. A cooling house market has also been observed which calls for looser monetary conditions in the country.