As the New Year begins, Asian stocks experienced a muted start following a remarkable year for global equity markets in 2024. Regional markets faced selling pressure today, influenced by a downturn in U.S. stocks on Tuesday, which concluded the year with an unexpected decline after a booming period of trading.
Both the S&P 500 and Nasdaq 100 indexes saw a fourth consecutive session of decline, as concerns over rising bond yields and anticipated hikes in interest rates led to a year-end repositioning. Meanwhile, the dollar index maintained its position near multi-year highs during Asian trading, having increased over 2.5% in December.
Gold prices saw a slight increase, as traders await further direction on the Federal Reserve’s interest rate policies and the fiscal and tariff strategies of U.S. President-elect Donald Trump. Oil prices remained buoyant, with Brent crude futures approaching $75 a barrel following industry data indicating a decline in U.S. oil inventories last week.
Markets in China and Hong Kong experienced significant declines due to persistent uncertainties surrounding U.S.-China relations as the New Year unfolds. Concerns have been raised that bilateral ties might deteriorate rapidly during Trump’s second term. Additionally, disappointing data on Chinese factory activity highlighted a challenging economic outlook and underscored the need for additional policy measures. The Caixin/S&P Global manufacturing PMI for China fell to 50.5 in December, down from 51.5 in the previous month, missing analysts' expectations.
The Shanghai Composite index in China dropped 2.66% to 3,262.56, amid increasing uncertainties related to the international economic landscape and global trade. Similarly, Hong Kong's Hang Seng index declined by 2.18% to 19,623.32, despite China's assurances of pursuing more aggressive economic policies in 2025 to achieve a growth target of around 5%. Alibaba Group Holding saw its shares dip by 1.3% following its agreement to sell its stake in Sun Art Retail Group Ltd. to private equity firm DCP Capital.
Japanese markets remained closed through January 6, as did New Zealand markets due to a holiday. In Seoul, stocks ended slightly lower, influenced by data revealing a contraction in factory activity in December. Political instability also affected the market, with impeached president Yoon Suk Yeol resisting arrest for a third consecutive day. Bank of Korea Governor Rhee Chang-yong remarked in a New Year address that monetary policy easing would need to remain adaptable this year, given the existing political and economic uncertainties.
Conversely, Australian markets closed on a higher note, as trading resumed following the New Year holiday. The benchmark S&P/ASX 200 rose by 0.52% to 8,201.20, while the broader All Ordinaries index increased by 0.53% to 8,465. This surge was led by mining, energy, and gold stocks, boosted by strong commodity prices. Investors largely overlooked new data indicating a decline in Australian house prices in December, marking the first drop in 22 months.
The material has been provided by InstaForex Company -
www.instaforex.com
