Asian stock markets experience dip
Date
12/31/2024 5:06:34 AM
(MENAFN) Asian stock markets experienced a dip on Tuesday in cautious year-end trading as investors reduced expectations for significant U.S. interest rate cuts in 2025 and prepared for the incoming administration of President-elect Donald Trump. The dollar remained strong against most other currencies. Trading volumes were light due to the upcoming New Year holidays and Japan's market closure for the week. The anticipated “Santa’s Rally” lost momentum as rising U.S. bond yields put pressure on high stock valuations and bolstered the dollar.
The MSCI Asia-Pacific Index, excluding Japan, fell by 0.2%, but was set to end 2024 with an 8% gain, marking a second consecutive year of positive returns. China’s CSI300 remained flat, while Hong Kong’s Hang Seng saw a 0.3% rise in early trading. Data revealed that China’s industrial activity grew for the third consecutive month in December, though at a slower pace, indicating that the country’s new economic stimulus was helping the economy.
On Wall Street, major indices ended Monday with significant declines due to year-end tax adjustments, concerns about stock valuations, and uncertainty surrounding 2025. Looking ahead, investors are expected to focus on the Federal Reserve’s interest rate policy in 2025, as it forecasted just two rate cuts for the year, down from the earlier prediction of four, due to persistently high inflation.
Among Asian markets, Taiwan’s tech-focused index performed best with a 28% gain for the year, while Japan’s Nikkei and Hong Kong’s Hang Seng both saw solid increases of 19% and 18%, respectively. However, South Korea's KOSPI index fell by 10% due to political instability. The dollar index rose 6.5% this year, while the Japanese yen dropped by over 10%, marking its fourth consecutive year of decline. Oil prices fell for the second year in a row due to demand concerns, while gold surged by over 26%, its best annual performance in more than a decade, driven by geopolitical tensions and easing monetary policies.
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