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GLOBAL MARKETS-Asia stocks tumble from record highs on profit taking; dollar gains
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GLOBAL MARKETS-Asia stocks tumble from record highs on profit taking; dollar gains
Nov 3, 2025 11:24 PM

*

Tech drives initial rally, but stock traders cautious

after weak

US data

*

Divergent views among Fed officials cloud outlook for

December

rate cut

*

RBA refrains from rate cut as widely expected, flags

inflation

concerns

(Updates prices ahead of European markets open)

By Kevin Buckland

TOKYO, Nov 4 (Reuters) - Asian stock markets from Tokyo

to Taipei and Seoul tumbled from all-time highs on Tuesday, with

investors aggressively booking profits following strong tech-led

rallies over recent weeks.

Sentiment was weighed by weakness in U.S. economic data,

while a divergence in views from Federal Reserve officials

clouded the outlook for a December interest rate cut.

The U.S. dollar rose to a nearly nine-month peak versus the

yen, as well as a three-month high against the euro.

Australia's central bank refrained from lowering rates, as

widely expected, and signaled caution about any further easing

amid heated inflation.

Overnight, a rally in U.S. tech shares buoyed both the U.S.

S&P 500 and Nasdaq, though futures pointed

sharply lower on Tuesday, down 0.9% and 1.3%

respectively. Pan-European STOXX 50 futures dropped

0.9%.

The catalyst for the latest leg up was Amazon's $38 billion

cloud services deal with ChatGPT creator OpenAI.

"People are turning cautious about these circular

transactions around AI, with Nvidia at the centre of

everything," said Tony Sycamore, an analyst at IG.

"It's concerns about all the capex that's been spent,

without knowing where the revenue is going to come from."

Japan's Nikkei added 0.4% to reach a record

52,636.87 early in the day, though it later lost 1.7%.

Taiwan's TAIEX initially gained as much as 0.8% to

set its own record high before sliding 0.8%.

South Korea's KOSPI tumbled 2.3% following a 2.8%

surge on Monday, when it reached an all-time peak.

Hong Kong's Hang Seng dropped 0.9% and onshore-listed

Chinese blue chips slid 1.1%.

Australia's stock benchmark lost 0.9%, while the

Aussie dollar slumped 0.5%.

The U.S. dollar was supported by reduced bets for near-term

Fed easing, edging up to 154.48 yen for the first time

since February 13, and to $1.1498 per euro for the first

time since August 1.

The U.S. dollar index, which measures the currency

against the euro, yen and four other peers, topped 100 for the

first time in three months.

However, those advances evaporated as traders bought the yen

and euro for their haven appeal as stock markets slid.

The polarised views on policy among Fed officials have also

become a source of worry for the market, particularly with

official economic data still suspended due to the federal

government shutdown, leaving investors groping in the dark for

clues on U.S. economic health.

Accounts from manufacturers in the private Institute for

Supply Management survey on Monday painted a dire picture of the

factory sector, showing U.S. manufacturing contracted for an

eighth straight month in October as new orders remained subdued.

Fed Governor Stephen Miran on Monday restated the case for

deep rate cuts, while Chicago Fed President Austan Goolsbee said

he was leery of further reductions while inflation remained

significantly above the central bank's 2% target.

The Fed lowered rates last week but Chair Jerome Powell

suggested that might have been the last cut of the year.

Traders are now pricing in a 67.3% chance of a rate cut in

December, compared with 90.5% a week earlier, CME FedWatch

showed.

Gold failed to benefit from haven flows, as it

continued to find its footing following a sharp retreat from a

record high in mid-September. Bullion was last down 0.6% at

around $3,977 per ounce.

Crude oil prices slipped as markets read OPEC+'s decision to

pause output hikes in the first quarter as a signal of

oversupply in the market.

Brent crude futures edged down 0.4% to $64.65 a

barrel and U.S. West Texas Intermediate crude was off

0.4% at $60.82 a barrel.

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