Asian shares are at their lowest in three weeks

Asian shares plunge to 3-week bottom. Photo: Stockbiz

Asian shares are now at their lowest in three weeks, as a press conference on housing policy in China disappointed investors and real estate stocks tumbled, while the euro hit an 11-week low ahead of expected interest rate cuts by the European Central Bank, according to Reuters.

Japan’s Nikkei index dropped 0.7%, and China's major indices reversed earlier gains. The Shanghai Composite rose 0.1% but is currently trading 10% lower than last week's 33-month high.

Asian stocks declined on Wednesday following disappointing earnings from Europe's largest tech company, ASML, which dragged down chip stocks globally, while expectations of a modest interest rate cut path from the Federal Reserve supported the dollar.

Also putting pressure on the market were lackluster earnings from French luxury giant LVMH, indicating weakened demand for luxury goods in China, dampening enthusiasm around China that had been boosted by stimulus measures.

South Korean technology stocks fell 0.6%, while chip stocks contributed to a 1.8% drop in Japan's Nikkei. Chinese Taipei stocks decreased by 1.2%, leading the MSCI Asia-Pacific index outside Japan to fall by 0.32%.

Matt Simpson, a senior market analyst at City Index, noted that investors might be questioning how much risk they truly want to take on, especially with the upcoming U.S. elections on November 5.

"I expect investors to become increasingly anxious as we approach November 5, with profit-taking at lofty levels," he stated.

The CSI300 real estate stocks plummeted by 7%, reversing two days of gains. Hong Kong's (China) Hang Seng index rose 0.5% but remained 12% lower than its recent peak, as investors awaited further Chinese government spending and signs of its impact on the economy.

Meanwhile, in Europe and the U.S., earnings from the major TSMC chipmaker alleviated concerns about difficulties in the tech sector.

By the close of trading on October 17, the Dow Jones rose 0.4% to 43,239.05, the Nasdaq Composite gained less than 0.1% to 18,373.61, and the S&P 500 fell less than 0.1% to 5,841.47.

Traders are also digesting newly released data on retail sales rising last month and another interest rate cut from the ECB.

Sam Burns, chief strategist at Mill Street Research, told AFP that positive economic news in the U.S. and the ECB's rate cut positively impacted stock markets.

"Overall, the ECB's decision is good news for investors," said Jochen Stanzl, chief analyst at CMC Markets. "Investors are in a positive environment."

Markets are keeping an eye on new developments in the U.S. economy as well as the Federal Open Market Committee (FOMC) policy meeting of the U.S. Federal Reserve (Fed) in early November.

Currently, the market remains optimistic about the Fed's potential to continue with a 0.25% rate cut at the upcoming meeting. Additionally, the U.S. presidential election in November will also have certain effects on global financial markets.

As investors listen for and await significant future developments, slow and cautious trading is likely to continue into next week./.