Amid Fed uncertainty and China caution, Asian equities declined overnight

Prior to the Federal Reserve's year-end meeting, most Asian equities fell on Wednesday as risk aversion persisted. The central bank's outlook was further clouded by unsettling U.S. inflation data.

Concerns over China's slow economic development also persisted, as seen by the local equities' sharp declines following data earlier this week that showed the nation was moving closer to a deeper deflationary trend.

According to new statistics, China's disinflation became worse in November, raising fears of a protracted economic slowdown in the largest economy in Asia. The inflation figure was also released following a run of mediocre November readings.

As senior Communist Party leaders advocated for additional fiscal expenditure and supporting policies, markets showed little interest in the stimulus measures that China officials were proposing.

Prior to the Fed meeting, investors dug down, which resulted in mostly muted Asian markets. The timing of the central bank's potential rate cut in 2024 has become more unpredictable due to data indicating a modest increase in U.S. inflation.

Markets, however, continued to believe that the Fed will hold off on raising rates later in the day. Asian markets found some solace in this idea, as did Wall Street's robust overnight finish.

Over the past month, Asian equities have had outstanding gains driven by growing expectations of a less aggressive Fed in 2024. However, these wagers will now be put to the test later on Wednesday, when it is widely anticipated that the central bank will reveal its 2024 prognosis.

As inflation increases, Indian equities decline from all-time highs.

The Nifty 50 index for India began the day on a somewhat lower note on Wednesday, continuing its decline from earlier this month's record highs.

According to data released on Tuesday, the Reserve Bank of India warned of a potential revival in inflation, and this was supported by the steep increase in CPI inflation in November. The primary cause of the increase was rising food costs.

(Sources: investing.com, reuters.com)