Australia

Australian shares are set to rise at the open, after Wall St finishes the month slightly up.

ASX futures were up 0.5% or 35 points as of 8:30am on Wednesday, suggesting a higher open.

The S&P 500 climbed 0.6% on Tuesday, to end October 2.2% lower. Every industry segment in the benchmark index rose, with real-estate companies, banks and utilities leading the way. Arista Networks paced the index, gaining 14% after the networking equipment company beat quarterly sales and profit expectations.

But the broader index was weighed down by earnings-related selloffs, including in heavy equipment manufacturer Caterpillar, down 6.7%, and contract drugmaker Catalent, which lost about 14%. Vans shoe owner VF Corp. also dropped 14% in its worst day since 1987's Black Monday stock market crash.

The tech-heavy Nasdaq Composite climbed 0.5% and the Dow Jones Industrial Average added 0.4%, or 124 points. For the month, they lost 2.8% and 1.4%, respectively.

The three-month slide in stocks has coincided with a three-month pause in interest-rate increases, the longest since the Federal Reserve began boosting borrowing costs in March 2022 to slow inflation.

In commodity markets, Brent crude oil fell 0.1% to US$87.41 a barrel while gold was flat at US$1,984.17.

In local bond markets, the yield on Australian 2 Year government bonds was higher at 4.45% while the 10 Year yield was also up at 4.92%. US Treasury notes were up, with the 2 Year yield at 5.09% and the 10 Year yield at 4.93%.

The Australian dollar hit 63.34 US cents down from the previous close of 63.73. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.93.

Asia

Chinese shares closed lower after surprisingly weak October PMI data, which suggested activity in the manufacturing sector was contracting. The PMI suggests the path of China's economic recovery remains fragile and the authorities will unlikely withdraw growth-supportive measures in the near term, ANZ Greater China chief economist Raymond Yeung said in a research note. The benchmark Shanghai Index fell 0.1% to 3018.77, ending the month 2.95% lower. The Shenzhen Composite Index declined 0.5% and the tech-heavy ChiNext Price Index was also 0.5% lower. Auto and hardware stocks led the losses. BYD declined 2.5% and Great Wall Motor was down 2.1%. BOE Technology Group shed 2.5% and Luxshare Precision Industry lost 3.0%.

Hong Kong shares closed lower, with the benchmark Hang Seng Index declining 1.7% to 17112.48. The index lost 3.9% for the month. Investors are back to a wait-and-see mode amid weakened sentiment after China's October PMI data signaled the country's economic recovery remains fragile, said Redmond Wong, market strategist at Saxo. Most sectors fell, dragged by real estate and tech stocks. Lenovo Group dropped 5.3% and Baidu was down 4.1%. Country Garden Services lost 4.1%. Meanwhile, ENN Energy Holdings rose 2.1% and China Resources Power was up 1.2%.

Japan's Nikkei Stock Average rose 0.5% to close at 30858.85, erasing earlier losses after the BOJ mostly maintained its accommodative policy stance. The BOJ left its cap on the 10-year JGB yield unchanged at 1.0%, but called for more flexibility. Among best performers on the benchmark index, Nomura Research Institute rose 4.8%, T&D Holdings added 4.7% and Osaka Gas was up 4.6%. The 10-year yield was up 6 bps at 0.950% after earlier touching 0.955%, its highest level since May 2013. USD/JPY was at 150.22, compared with 149.63 as of Monday's Tokyo stock market close.

Indian shares end down, tracking losses among regional peers ahead of the U.S. Federal Reserve's policy decision meeting on Wednesday. Auto and healthcare stocks weighed on the market. Mahindra & Mahindra dropped 2.6% and TVS Motor Company shed 0.8%. Bajaj Healthcare lost 2.2% and Sun Pharmaceutical Industries slid 2.4%. Titan Co. and Kotak Mahindra Bank were the best performers on the benchmark index, rising 2.5% and 1.2%, respectively. GAIL (India) rose 1.1% after its 2Q results. Bharti Airtel was down 1.2% ahead of 2Q results due after market close. The Sensex declined 0.4% to 63874.93, ending the month 3.0% lower.

Europe

European stocks rise ahead of an expected higher U.S. open, though Asia closed mixed. The Stoxx Europe 600 gains 0.7%, the FTSE 100 advances 0.5%, the DAX climbs 0.6% and the CAC 40 rallies 1%, with property shares among the biggest risers. Oil stocks trade mixed as Brent crude increases 0.5% to $86.78 a barrel. Markets in Australia and Japan rose, but stocks in mainland China, Hong Kong and South Korea fell. "Asian markets struggled overnight thanks to data showing China's manufacturing sector slipped back into contraction in October, denting hopes of a rebound," IG analysts write.

The FTSE 100 rises 0.8% to 7351.57 points, tracking gains in European stocks and ahead of Thursday's Bank of England rate decision where markets expect interest rates to be kept on hold. "Interest rates look set to remain on hold in the U.K. and the U.S. following the ECB's [European Central Bank] decision last week to keep rates unchanged," Victoria Scholar head of investment at Interactive Investor, says in a note. Telecommunications company Airtel Africa gains 8.3% after posting strong growth in customers in 1H, while online real estate portal Rightmove gains 3% Berenberg upgraded the stock to buy from hold. Mining giant Glencore rises 1% after it backed full-year copper, zinc and coal production guidance.

North America

A busy day for corporate earnings reports ended with major stock indexes higher, though not enough to prevent them from a third-straight monthly decline.

The S&P 500 climbed 0.6% on Tuesday, to end October 2.2% lower. Every industry segment in the benchmark index rose, with real-estate companies, banks and utilities leading the way. Arista Networks paced the index, gaining 14% after the networking equipment company beat quarterly sales and profit expectations.

But the broader index was weighed down by earnings-related selloffs, including in heavy equipment manufacturer Caterpillar, down 6.7%, and contract drugmaker Catalent, which lost about 14%. Vans shoe owner VF Corp. also dropped 14% in its worst day since 1987's Black Monday stock market crash.

The tech-heavy Nasdaq Composite climbed 0.5% and the Dow Jones Industrial Average added 0.4%, or 124 points. For the month, they lost 2.8% and 1.4%, respectively.

The three-month slide in stocks has coincided with a three-month pause in interest-rate increases, the longest since the Federal Reserve began boosting borrowing costs in March 2022 to slow inflation.

Fed officials are likely to hold interest rates steady at this week's policy meeting, which concludes Wednesday. Still, they have left the door open to further increases in the coming months if progress stalls in slowing wage and price growth.

"The higher rate environment has not fully seeped into stock valuations. Hopefully we're almost there," said Nicholas Galluccio, portfolio manager of the Teton Westwood SmallCap Equity Fund.

Galluccio has been positioning for a rebound by buying shares of smaller tech businesses that supply the giant firms that have led the rally earlier this year as well as industrial companies with order backlogs, such as Flowserve, which sells pumps and valves to energy and chemical producers. "I haven't seen stocks this cheap since before Covid," he said.

He is counting on a lot of the roughly $5.6 trillion that is parked in money-market funds -- and earning around 5% or more -- moving back into the stock market as rates ease.

Yields on longer-dated Treasurys ticked lower Tuesday. The benchmark 10-year yield declined to 4.874%, down from as high as 5.021% last week.

Other investors are sticking with big allocations to cash. Christian Chan, chief investment officer at AssetMark, said the firm has been trimming its stock exposure, content to earn the highest yields in years on safe investments.

"We see a fair bit of stress on the consumer side of things and that makes us more cautious than we were this summer," Chan said. He pointed to data showing that all but the wealthiest Americans have spent their pandemic stimulus money while credit-card spending has surged.

The Conference Board on Tuesday said consumer confidence fell in October for a third straight month.

In commodities markets, benchmark U.S. oil futures shed $1.29 a barrel to end Tuesday at $81.02, down 11% in October. December natural-gas futures jumped 6.7% on forecasts for cooler weather.

Gold prices dropped back below $2,000 per troy ounce, having Monday settled above that mark for the first time since July. Gold still had its best month since March, when bank failures sent the precious metal to near record highs. Bitcoin held near its highest level in a year Tuesday.