Global narkets react: Asian shares and oil prices respond to Wall Street November surge

Global stocks saw a decline on Friday, despite Wall Street concluding its best month of the year with significant gains in November.

While U.S. futures experienced an uptick, oil prices continued to decrease, even with OPEC’s extended production cuts. The output cuts, though ongoing, are expected to be compensated by other producers like the U.S., alleviating pressure on prices.

In electronic trading on the New York Mercantile Exchange, U.S. benchmark crude oil dropped 10 cents to $75.86 a barrel. Brent crude, the international standard, also fell 22 cents to $80.64 a barrel.

Hong Kong‘s Hang Seng fell by 0.5% to 16,952.14, hovering near a one-year low, while the Shanghai Composite index edged down 0.1% to 3,027.38.

A private sector survey revealed unexpected expansion in Chinese manufacturing activity in November, contradicting a previous report showing weak factory demand.

Japan‘s Nikkei 225 index lost 17 points to 33,431.51 after a private-sector survey indicated a contraction in Japan’s manufacturing in November at the fastest pace in nine months.

South Korea‘s Kospi dropped 1.2% to 2,505.25, Australia‘s S&P/ASX 200 sank 0.2% to 7,073.20, India‘s Sensex gained 0.8%, and Bangkok’s SET was 0.2% higher.

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On Wall Street, the S&P 500 rose 0.4% to 4,567.80, and the Dow jumped 1.5% to 35,950.89, boosted by positive results from cloud-based software company Salesforce. However, data storage company Pure Storage fell 12.2% after providing a disappointing revenue outlook.

The Nasdaq composite dropped 0.2% to 14,226.22. In November, the Dow rose 8.8%, and the Nasdaq increased by 10.7%.

The market’s steady climb in November was fueled by optimism that the Federal Reserve might halt interest rate hikes to curb inflation. A Commerce Department report indicated stable prices from September to October, contributing to the belief that inflation may be cooling.

The Labor Department reported a slight increase in Americans filing for unemployment benefits, signaling a strong labor market but with signs of softening.

The Federal Reserve’s aggressive rate hike policy, aimed at taming inflation, has pushed its benchmark interest rate to its highest level in two decades. Wall Street anticipates the central bank maintaining steady rates through December and into early 2024, possibly considering rate cuts. The latest economic growth and consumer confidence data have bolstered hopes for a “soft landing” without triggering a recession.

Treasury yields moved higher, with the 10-year Treasury yield slipping to 4.33% from 4.34%. In currency dealings, the dollar edged higher against the Japanese yen and the euro.