Asian Shares Mostly Lower After Weak Chinese Data

Asian stocks started the New Year on a subdued note after a stellar 2024 for global equity markets. Regional markets succumbed to selling pressure today after U.S. stocks slipped Tuesday, closing 2024 on an uncharacteristic down note after a roaring year of trading.

The S&P 500 and Nasdaq 100 indexes dropped for a fourth consecutive session in a year-end pullback amid concerns about rising bond yields and expectations of higher interest rates.

The dollar index held near multi-year highs in Asian trading after gaining over 2.5 percent in December.

Gold nudged higher as traders await clarity on the Federal Reserve’s rate trajectory and U.S. President-elect Donald Trump’s fiscal and tariff policies.

Oil held year-end gains, with Brent crude futures nearing $75 a barrel after industry data showed that U.S. oil inventories declined last week.

Chinese and Hong Kong markets fell sharply amid much uncertainty about the outlook for U.S.-China relations in the New Year. It is feared that bilateral relations may quickly plunge to a new low during Trump’s second term.

Meanwhile, underwhelming Chinese factory activity data also signaled a rocky economic outlook and increased calls for further policy support.

The Caixin/S&P Global manufacturing PMI for China edged down to 50.5 in December from 51.5 the previous month, undershooting analysts’ forecasts.

China’s Shanghai Composite Index tumbled 2.7 percent to 3,262.56 amid mounting uncertainties stemming from the overseas economic environment and global trade.

Hong Kong’s Hang Seng index dove 2.2 percent to 19,623.32 despite China pledging more proactive economic policies in 2025 to hit the growth target of around 5 percent.

Alibaba Group Holding dropped 1.3 percent after the company agreed to sell its shares in Sun Art Retail Group Ltd. to private equity firm DCP Capital.

Japanese markets remain closed through January 6. New Zealand markets were also closed for a holiday.

Seoul stocks finished marginally lower as data showed factory activity contracted in December. Political uncertainty also weighed, with impeached President Yoon Suk Yeol resisting arrest for a third day.

Bank of Korea Governor Rhee Chang-yong said in a New Year’s address that the pace of monetary policy easing would need to be flexible this year due to heightened political and economic uncertainty.

Australian markets closed higher as trading resumed after the New Year holiday. The benchmark S&P/ASX 200 Index rose 0.5 percent to 8,201.20, while the broader All Ordinaries Index settled 0.5 percent higher at 8,465.

Mining, energy and gold stocks led the advance on the back of strong commodity prices. Investors shrugged off new data that showed Australian house prices declined for the first time in 22 months in December.