Ominous Start for Asian Stocks in 2025 After Tough Year End in 2024

Asian stocks were set to start the New Year on a cautious footing following an unfavorable end to an otherwise fantastic 2024 for international share investors.

Shanghai benchmark futures fell as mainland Chinese gauges fell on the last trading day of December. The S&P 500 and Nasdaq 100 indexes fell for the fourth time in a row, part of a year end selloff that has reduced large cap market valuations by more than a trillion dollars.

Sydney’s shares barely moved while futures indicated Hong Kong’s benchmark may go up a touch. Markets in Japan are closed till January 6th,  South Korea will open late and New Zealand will continue to be on vacation. Equity futures in the US fell.

Following a solid run for the greenback, the yen dropped Thursday to about 157 per dollar setting the stage for a third daily decline versus the dollar. It was the strongest year for the Bloomberg Dollar Spot Index in over ten years.

Following industry data showing declining US crude stockpiles, oil prices remained stable in the first session of the new year. A route that has been in use for fifty years was shut off when Russian gas ceased to flow to Europe through Ukraine. Following the expiration of a crucial transit agreement both parties announced the suspension on Wednesday.

Even though it was less than in 2023, a wide measure of Treasuries managed to make an annual gain in 2024. Because of the Japanese holiday, treasury trading is closed throughout Asia. In other headlines during the New Year period, Nippon Steel Corp made a last ditch attempt to secure President Joe Biden’s permission for its acquisition of the American company by offering to grant the US government a veto over any reduction in US Steel Corp.’s production capacity. Stocks of US Steel surged by the most in a year.

Alibaba Group Holding Ltd. agreed to sell its Sun Art Retail Group Ltd. shares to DCP Capital, a private equity firm in China in order to concentrate on its primary online business and divest itself of a prominent physical commerce asset. China’s BYD Co meanwhile claimed a year end spike that increased overall sales to 4.25 million passenger cars in the previous year.

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Macroeconomically speaking, President Xi Jinping predicted that the second largest economy in the world would grow by about 5% in 2024. China’s central bank increased liquidity support for the economy and financial markets at year end by injecting 1.7 trillion yuan ($233 billion) of cash in December.

Singapore’s economy did better than anticipated in 2024, according to Prime Minister Lawrence Wong. According to Wong’s New Year’s greeting, the GDP grew by 4%. That exceeded the 3.5% expansion predicted by the commerce ministry in November.

Acting President Choi Sang-mok rejected his aides’ effort to quit collectively on Wednesday further exacerbating South Korea’s ongoing political crisis. According to new data, Australian home prices fell in December for the first time in 22 months as the supply of houses rose and purchasers were further priced out of the market.