Asian shares continued to be traded amid an air of uncertainty after the new year holiday with contrasting data out of China and more key numbers due out later this week eroding the appetite for risk.
Global shares had ended 2023 with their biggest annual rise in four years, driven by the prospect that major central banks could begin easing rates this year in a major boost for consumers and businesses shackled by high borrowing costs.
But China stocks closed down on the first trading session of 2024, snapping a three-session winning streak, as latest data signalled an uneven economic recovery, while business confidence for 2024 appeared to be subdued.
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A private-sector survey showed China’s factory activity expanded at a quicker pace in December due to stronger gains in output and new orders.
But the Caixin PMI contrasted with official data released on Sunday that showed manufacturing activity shrinking at a faster pace and more than expected last month.
The blue-chip CSI 300 Index lost 1.30% while the Shanghai Composite Index slipped 0.43%, or 12.66 points, to 2,962.28. The Shenzhen Composite Index on China’s second exchange dropped 0.76%, or 14.00 points, to 1,823.85.
Real estate developers slumped 3.6% to lead the decline, while shares in consumer staples, artificial intelligence, new energy declined between 1.8% and 2.3%.
Tech giants listed in Hong Kong lost 1.3% and mainland developers listed there dropped 4.3%. Hong Kong’s Hang Seng Index fell 1.52%, or 258.84 points, to end at 16,788.55 and the Hang Seng China Enterprises Index finished down 1.66%.
The Hang Seng had ended 2023 with a yearly loss of close to 14%, making it one of the world’s worst performing stock markets.
Elsewhere across the region, in earlier trade, there were also losses in Seoul, Singapore, Mumbai, Taipei and Jakarta, though Sydney and Manila edged up.
Tokyo was closed for a holiday though investors were keeping an eye on developments in Japan, a day after a huge quake that caused “extensive” damage and numerous casualties.
US Dollar Holds Steady
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.6% and was on track to post its steepest drop in a month, giving back some of its gains, having risen 4.5% in December. Still, it stood not too far from a five-month high hit last week.
Market focus now turns to a slew of data due this week which will give further clarity on how much room there is for major central banks globally to ease monetary policy, and how soon those rate cuts could come.
Flash euro zone inflation figures are due on Friday, alongside the closely-watched US non-farm payrolls report.
In the currency market, the dollar held broadly steady after clocking its first yearly loss since 2020 last week, weighed down by expectations of lower US rates this year.
The euro eased 0.11% to $1.1032, while the yen slid 0.4% to 141.40 per dollar, struggling to make headway as investors remain on edge as to whether the Bank of Japan will exit negative interest rates this year.
Elsewhere, oil prices jumped on Tuesday, with Brent crude futures and US WTI crude futures each rising roughly 2%, due to potential supply disruptions in the Middle East after a naval clash in the Red Sea, among other things.
Brent gained $1.56 to $78.59 a barrel, while US crude rose $1.28 to $72.93.
Key figures
Tokyo – Nikkei 225 <> CLOSED
Hong Kong – Hang Seng Index < DOWN 1.52% at 16,788.55 (close)
Shanghai – Composite < DOWN 0.43% at 2,962.28 (close)
London – FTSE 100 < DOWN 0.02% at 7,731.58 (0933 GMT)
New York – Dow < DOWN 0.06% at 37,689.54 (Friday close)
- Reuters with additional editing by Sean O’Meara
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China’s Factory Slump Deepens, Stimulus Pressure Grows
Nikkei Caps Best Year in a Decade, Hang Seng Decline Continues
