Asian Markets Under Pressure: China's Sluggish Retail and New Political Developments

The Asian stock markets recorded mostly declines at the beginning of the trading week, triggered by disappointing retail sales figures from China. These unexpectedly weak data intensify concerns about the country's economic situation and raise doubts about Beijing's recent stimulus commitments. Further attention is on the upcoming monetary policy decisions of the US Federal Reserve and the Bank of Japan. Market observers are also looking to Seoul, where political developments are gaining momentum following the impeachment of South Korean President Yoon Suk Yeol. These developments give the last full trading week of the year a sobering start. Data from Hong Kong and Shanghai show that China's retail sales increased by only three percent last month, falling far short of forecasts. These figures illustrate the challenges facing the Chinese leadership in revitalizing domestic consumption and strengthening the world's second-largest economy. Political leaders around President Xi Jinping pledged at the recent Central Economic Work Conference to pursue a "moderately loose" monetary policy and expand financing options for businesses and individuals. Despite such ambitious plans, investors remained skeptical. In other parts of Asia, market sentiment was mixed. While losses were recorded in Sydney, Wellington, Manila, and Jakarta, the stock exchanges in Tokyo, Singapore, and Taipei achieved gains. In Seoul, the situation remained tense after the impeachment of President Yoon led to market fluctuations. Globally, attention is now focused on the Fed's interest rate decision expected on Wednesday. Although another rate cut is anticipated, there are concerns that the US Federal Reserve may have to slow its pace of easing next year due to persistent inflation.