Asia-Pacific markets mixed as South Korea delivers surprise rate cut, US markets retreat ahead of Thanksgiving

Asia-Pacific markets showed a mixed performance on Thursday as investors reacted to a surprise interest rate cut by South Korea's central bank and digested data on US inflation.

Meanwhile, Wall Street’s rally came to a halt during a thin trading session.

South Korea surprises with rate cut

The Bank of Korea unexpectedly reduced its benchmark interest rate by 25 basis points to 3.0%, marking the first back-to-back rate cuts since 2009.

Analysts had anticipated the central bank would hold rates steady at 3.25%, following its October reduction.

The move comes amid concerns over sluggish economic growth, with third-quarter GDP expanding by just 1.5% year-on-year, falling short of the 2% forecast.

In response, South Korea’s Kospi index edged up 0.15%, while the smaller Kosdaq index gained 0.53%.

Asian market movements

Japan’s Nikkei 225 dipped 0.24%, while the broader Topix remained flat. Australia’s S&P/ASX 200 rose 0.49%, setting a fresh intraday high.

Hong Kong’s Hang Seng index slipped 0.48%, reversing its strongest rally of the month seen on Wednesday, while mainland China’s CSI 300 stayed flat.

The U.S. personal consumption expenditures (PCE) price index—a key inflation gauge—rose 2.3% year-on-year in October, up from 2.1% in September.

Core inflation, excluding food and energy, climbed to 2.8% from 2.7%, aligning with economists’ expectations.

US equity markets saw losses overnight, led by declines in technology stocks. Nvidia dropped over 1%, while Meta Platforms slipped 0.8%.

Dell Technologies and HP Inc. plunged more than 12% and 11%, respectively, after issuing weak earnings forecasts.

The S&P 500 fell 0.38%, snapping a seven-day winning streak, while the Nasdaq Composite lost 0.6%. The Dow Jones Industrial Average declined 138.25 points, or 0.31%.

Markets in the US will remain closed on Thursday for the Thanksgiving holiday.

Yen dips slightly, euro steady; oil and gold prices hold firm

The yen slipped 0.3% to 151.615 per dollar but stayed close to the one-month high reached in the previous session.

The currency is on track for its strongest weekly gain since early September, fueled by growing expectations of a potential Bank of Japan rate hike next month.

The euro held steady after a 0.7% jump in the prior session, driven by a shift in market sentiment following comments from European Central Bank board member Isabel Schnabel.

Schnabel suggested rate cuts should be gradual and aimed at neutral rather than accommodative levels, dampening expectations of aggressive easing.

Oil prices remained stable as supply concerns eased after a ceasefire agreement between Israel and Hezbollah. Brent crude futures were unchanged at $72.80 per barrel, while US West Texas Intermediate crude traded steady at $68.70 per barrel.

Spot gold edged lower to $2,626 per ounce as investors weighed market developments.