Asian stocks ended the year mainly in the red yesterday after worries about this year and profit-taking turned Wall Street’s usual holiday period “Santa Claus rally” into a mini-rout.
The three main US indices all slumped about 1 percent on Monday, adding to Friday’s losses, with Tesla Inc down 3.3 percent and Facebook owner Meta Platforms Inc off 1.4 percent.
Volumes were thin, but brokers said investors were locking in gains after a bumper 2024, particularly for the “Magnificent Seven” troop of US tech giants.
Photo: Reuters
Concerns about the slow pace of interest rate cuts by the US Federal Reserve and uncertainty about the tariff plans of incoming US president Donald Trump were also souring the mood.
“In Asia, notably China, tariffs may appear to be a manageable obstacle if they were the only concern,” SPI Asset Management managing partner Stephen Innes said.
“However, China’s economic difficulties go well beyond simple trade conflicts. The nation is also contending with serious domestic consumption challenges and self-induced setbacks in its technology sector,” Innes said.
Chinese stocks registered their first annual gain following an unprecedented three-year decline, despite a dip on the final trading day of last year, while Hong Kong shares ended the year higher, supported by optimism over policy support.
The Shanghai Composite Index closed down 1.63 percent on the last day of the year at 3,351.76, but gained 12.8 percent last year, ending a two-year decline.
Hong Kong’s benchmark Hang Seng Index closed the year’s final session up 0.09 percent at 20,059.95, for an annual gain of 17.7 percent that ended four consecutive years of losses.
The TAIEX in Taipei closed 0.67 percent lower at 23,035.10. The index ended the year with an annual gain of 28.47 percent, the largest increase in 15 years.
Stocks in Sydney and Wellington were all down.
Tokyo was spared the year-end ennui after the Nikkei 225 index shut up shop on Monday with its best year-end close since Japan’s asset bubble burst in the 1990s.
Seoul also closed on Monday, before another day of tragedy and turmoil in South Korea.
Rescuers yesterday handed over the first bodies from the crash of a Jeju Air Boeing 737-800 to grieving families, South Korea’s deadliest air disaster on its own soil in which 179 people were killed.
Boeing Co shares fell more than 5 percent on Wall Street on Monday before recovering. On the political front, a South Korean court issued an arrest warrant for impeached and suspended President Yoon Suk-yeol, who briefly declared martial law on Dec. 3.
European stock trading was muted, with markets in Germany, Italy and Switzerland among those shut on New Year’s Eve, with shortened sessions in London and Paris.
As for commodities, gold was flat and set for one of its biggest annual gains this century after advancing 26 percent. Oil pushed higher after factory activity expanded for a third month in China, the latest evidence of economic recovery in the world’s top crude importer.
Additional reporting by Reuters and Bloomberg
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