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China in crisis sends markets in Asia into the red

Asian markets ended the session in the red, with falling indices in China, Japan and Hong Kong halting strong gains made this week.
The negative sentiment spread above all for one reason, linked to the macroeconomic dynamics of the dragon: the new Chinese data showed prolonged weakness in the real estate sector and undermined some of the recent optimism about the recovery of the world's second largest economy.
House prices in China fell at the fastest pace since 2015 and the data confirmed the difficulty in relaunching a key sector which is significantly hindering the recovery of the Asian power.
Stocks also fell partly as investors were disappointed by a high-level China-US meeting.
US President Joe Biden and Chinese leader Xi Jinping agreed to resume military communications and cooperate on counter-drug policies, a sign that ties are improving, but there was no other progress on more sensitive issues.
And this disappointed investors.
Overnight on Wall Street, stocks closed slightly higher as inflation data bolstered investors' hopes that the Fed is done raising interest rates.
The Dow Jones Industrial Average rose 0.47%, the S&P 500 gained 0.16% and the Nasdaq Composite pared earlier gains to close unchanged.
Money market traders have fully priced in the chances of the US central bank keeping rates stable in December, according to CME Group's Fedwatch tool.
The first rate cut of the cycle is expected in May 2024.
China's real estate crisis hits markets in Asia China's real estate sector continued to cause concern.
Today's data showed that house prices fell the most in eight years in October, a sign that the sector's weakness is worsening.
This comes after the monthly economic report showed a mixed recovery in China's economy.
“Investors could take some profits after yesterday's strong performance and are still trying to balance positive developments from the Xi-Biden APEC meeting with a somewhat mixed monthly economic report from China,” said David Chao, strategist at Invesco Asset Management.
Economic results released this week showed that China's industrial and commercial sectors are recovering, but sharp declines in real estate investment and weak house prices suggest lingering problems in the sector, which could slow the country's overall recovery.
The climate among investors is not very optimistic.
Japanese exports grew for the second straight month in October, but at a significantly slower pace due to declines in chip and steel shipments to China.
“Weak economic data from both countries points to the fact that the global economy is slowing, highlighting the continued headwinds businesses face,” said Tina Teng, market analyst at CMC Markets.
“The real estate crisis in China remained a major problem for the economy and weakening global consumer demand will likely continue to put pressure on sentiment,” he added.

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