(Bloomberg) -- Australia’s stock benchmark is on track to become the biggest laggard among Asia Pacific peers this month, weighed by uncertainty around the central bank’s timeline for rate cuts and China’s subdued recovery.
The S&P/ASX 200 Index has dropped 3% in December, putting it on course for the worst performance against major equity gauges in the region, according to data compiled by Bloomberg. The Australian benchmark is also headed for its weakest month since October 2023.
“It’s probably both the China factor and RBA maintaining a hawkish bias underpinning here,” said Charu Chanana, chief investment strategist at Saxo Markets. For next year, “the key wild card” lies in China’s ability to increase fiscal stimulus to support consumer demand, which could fuel a rebound in Australian shares, she added.
Despite the monthly decline, local equities have gained more than 7% this year. That momentum is expected to carry into 2025, as the likelihood of easy central bank policy boosts sentiment and China’s stimulus pledges support miners.
--With assistance from Audrey Wan and Abhishek Vishnoi.
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