Asian Stocks Open the Year with a Whimper
Most Asian stocks moved in a flat-to-low range on Monday, as investors took a cautious approach ahead of key economic readings this week. The dueling forces of decisive Federal Reserve comments and slow ustial interest rate decline also weighed on sentiment. Japan’s markets, in particular, plummeted in the most extreme, Dow Jones Industrial Average futures dropped in Asian trade, with investors now eyeing key data due on Friday for further cues on interest rates.
In Japan, the Nikkei 225 Index fell 1.3%, while the broader Topix Index shed 0.9%. Local markets took a weak start with the Nikkei 225 and Topix back in the fray after an extended new year holiday. Japanese automobile stocks tanked, pressured by increasing competition and worsening demand in top market China. Nippon Steel, the investor’s focus on Nippon Steel Corp, slid over 2% after a $15 billion takeover of U.S. Steel was struck down by President Joe Biden due to national security concerns.
China’s Shanghai Composite and Shenzhen Component Index, as well as Hong Kong’s Hang Seng Index, traded flat, with a focus on key inflation data for December this week, which could impact expectations for more Chinese stimulus. The country has been experiencing persistent deflation and a property market downturn, with President Tsai Ing-wen vowing to boost fiscal spending in 2025 to support the ailing economy. President Donald Trump has also threatened to impose crippling trade tariffs on China, potentially spurring a stronger stimulus response from Beijing.
Broader Asian markets generally remained range-bound, with Australia’s S&P/ASX 200 Index rising 0.1%, and Singapore’s STI gaining 0.3%. South Korea’s KOSPI, on the flip side, soared 1.6% as investors flocked to the heavily discounted markets after intense political turmoil and steep losses in December. Taiwan’s Foxconn, the parent company of Hon Hai Precision Industry Co Ltd, rose approximately 2% following record-high revenues in the fourth quarter of 2024, driven by sustained demand for artificial intelligence products.