Markets Today: China Services PMI Hits 3-Month Low, Equities Slide, FTSE 100 Eyes Fresh Highs

Most Read: Nikkei 225: Plummeted towards a key inflection support zone at 49,370/48,450 for potential bullish reversal

Asian stock markets experienced rollercoaster price action on Wednesday due to a sudden and sharp decline in prices, leading to the highest level of market unpredictability in months. This upheaval was triggered by similar worries about high stock valuations that had caused a slump on Wall Street.

The markets in Japan and South Korea were hit the hardest, with heavy selling targeting companies whose stock prices had recently soared.

Although the intense selling slowed down later in the afternoon, the drastic shifts in prices highlighted how nervous investors were. Tokyo's main index, the Nikkei, initially plummeted nearly 7% from its Tuesday record high before partially recovering to be down 2.8%.

Similarly, South Korean shares dropped as much as 6.2% before trimming losses to be down 2.9%. The broader Asia-Pacific index, the MSCI, saw its biggest drop (2.3%) since early April before closing 0.9% lower.

Major companies felt the pain: SoftBank Group in Japan dived as much as 14.3% following a drop in the US tech-heavy Nasdaq, while in South Korea, SK Hynix and Samsung Electronics fell by as much as 9.2% and 7.8% respectively.

In contrast, Chinese shares eventually rose despite an early dip and a report showing the service sector grew at its slowest pace in three months.

The CSI 300 index was last up 0.5% after China's tariff commission announced it would temporarily remove a 24% additional tariff on US goods for a year, though a 10% levy would remain, following the recent meeting between President Xi Jinping and US President Donald Trump.

The service sector in China grew at a slightly slower pace in October 2025, with the RatingDog China General Services PMI dropping to 52.6 from 52.9 the month before, although this was still slightly better than expected.

This lower reading indicated the slowest growth for the service industry since July. The main reason for the slowdown was a small drop in business from foreign customers, likely due to increased uncertainty in global trade. However, the good news was that domestic demand improved, and the total number of new customer orders grew faster than before. On the negative side, companies hired fewer people, partly because they had enough capacity and were worried about costs.

When it came to prices, the cost of running the business (like wages and raw materials) went up at the fastest rate in a year. In contrast, companies lowered their selling prices slightly to attract sales in a more competitive market. Looking forward, business confidence weakened a bit due to worries about the future of global trade and growing competition.

European stock markets reached their lowest point in two weeks on Wednesday because investors worldwide were still worried that stock prices were too high.

The main European index, the STOXX 600, dropped 0.4%, trading at levels last seen around mid-October. The biggest losers were technology stocks, which fell 1.3%, while typically safer sectors like food and beverage stocks saw a slight increase.

These fears about high stock valuations came back this week after record-setting rallies in the US (Wall Street) and Asian markets, largely fueled by excitement over artificial intelligence. Comments from major US banks on Tuesday added to these worries.

Corporate earnings also drove market movements. Shares in Novo Nordisk (the maker of the drug Wegovy) slipped 2% after the company lowered its full-year profit forecast. This happened as the Danish drugmaker's new CEO begins a major restructuring to better compete in the intense market for obesity drugs.

Another Danish company, Ambu (which makes endoscopy solutions), saw its shares plunge 12% after its results fell short of analyst predictions. In positive news, wind turbine maker Vestas saw its shares jump 10% after it reported third-quarter operating profits that were better than expected.

On the FX front, The dollar remained strong after hitting its highest level since April 1 late on Tuesday. The value of the US dollar index held steady at 100.16 after reaching a high of 100.25 at the close of trading on Tuesday. It also remained mostly unchanged against the euro, trading at 1.1486 per euro, following a 0.3% rise in the previous session that had pushed it to a seven-month high.

The nervousness that had caused traders to seek safety in foreign exchange markets in Asia disappeared by the time European trading began. This caused the safe-haven Japanese yen to lose its earlier gains, while currencies from the southern hemisphere, like the Australian and New Zealand dollars, moved higher., and the Swiss franc also stayed up.

Specifically, the risk-sensitive Australian dollar successfully bounced back from a 0.5% drop that had taken it to a multi-week low, ending the session slightly higher against the U.S. dollar. The New Zealand dollar recovered from a seven-month low (hit after the country reported its highest unemployment rate since 2016) and was last up 0.3%. However, the New Zealand currency did briefly drop to its lowest value against the Aussie dollar in 12 years.

Meanwhile, the British pound (sterling) struggled to rise, remaining near a seven-month low following hints from the British finance minister, Rachel Reeves, on Tuesday about potential broad tax increases in her upcoming budget.

Currency Power Balance

Oil prices slightly decreased on Wednesday. This dip was a result of the general decline across financial markets and the strength of the US dollar. Investors were also evaluating the future supply of oil.

Brent crude (the global benchmark) fell marginally by 6 cents to $64.38 per barrel, after hitting its lowest price in nearly two weeks during the previous day. U.S. West Texas Intermediate (WTI) crude also edged down by 7 cents, trading at $60.49 per barrel.

Gold prices increased on Wednesday as investors looked for cheaper deals after the metal had dropped to its lowest price in nearly a week during the previous trading session.

The price of spot gold rose 0.9% to $3,966.65 per ounce, recovering from a drop of more than 1.5% on Tuesday.

Currently, investors are also closely watching the release of U.S. private sector jobs data, as they hope to find hints about when the US central bank might start lowering interest rates.

For more on Gold prices, read Gold (XAU/USD) Price Slips 1.5% as $4000/oz Handle Remains Elusive. What Comes Next?

Markets have become more cautious this week, with investors adopting a more "defensive" attitude. There isn't one single clear reason for this shift, but if the markets experience a significant correction (a major drop), investors are likely to point to a few factors: concerns over high stock valuations, uncertainty about how many times the US Federal Reserve (Fed) will lower interest rates, and possibly even the election of Zohran Mamdani as the mayor of New York.

Today, the most anticipated economic news is the release of the ADP private sector jobs report for October. Experts predict a small gain of 30,000 new jobs, after a loss of 32,000 last month.

This report is once again closely watched by the market because official government jobs data is unavailable. A result that matches the expectation would likely support the US dollar, as it would reduce the certainty that the Fed will cut interest rates again in December (a move currently priced in with a 73% probability).

Conversely, a weak or negative jobs number would likely cause the dollar to fall slightly and could actually help boost risky assets, based on the belief that the Fed would then be more likely to cut rates in December.

Another key piece of data due out today is the ISM services report. Since this index is currently near the crucial 50-point mark (which separates growth from contraction), any result that is weaker than expected could help ease the strong upward pressure on the dollar

From a technical standpoint, the FTSE 100 has found support just shy of the 100-day MA and is now eyeing a move to print fresh highs.

The period-14 RSI has crossed back above the 50 neutral level hinting at the bullish momentum returning.

This does bode well for a move to print fresh highs.

If the 50 neutral level on the RSI holds, this could set the tone for a move toward fresh highs. There is some key resistance barriers that need to be cleared.

Immediate resistance rests at 9766 before the 9800 handle comes into focus.

A move lower here may find support at 9610 or potentially test the 100-day MA at 9562.

FTSE 100 Index Daily Chart, November 5. 2025

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