Asian stock markets showed mixed results on Thursday as trading resumed in several regions after the New Year’s holiday. Chinese stocks led the losses, driven by disappointing manufacturing data, while Singapore’s GDP reported a notable rise in annual growth.
China’s Manufacturing Growth Slows
China’s manufacturing sector showed signs of slowing, as indicated by the December Caixin/S&P Global manufacturing purchasing managers’ index (PMI). The PMI fell to 50.5, missing the forecast of 51.7 and slipping from 51.5 in November. A PMI above 50 indicates expansion, but the decline suggests a slower pace of growth.
The report highlighted weakening exports, affected by uncertainties in the global economic environment and trade. The official PMI for December, released earlier this week, came in even lower at 50.1, further indicating subdued activity.
The manufacturing slowdown weighed heavily on Chinese markets. Mainland China’s CSI 300 fell by 1.42%, while Hong Kong’s Hang Seng Index dropped 1.47%. The Chinese offshore yuan strengthened by 0.21% to trade at 7.3162 against the U.S. dollar, recovering slightly after hitting its weakest level since October 2022 earlier this week.
Mixed Performances Across Asian Markets
South Korea’s Kospi index declined by 0.37%, while the Kosdaq rose by 0.71%. The markets opened an hour later than usual to mark the new year. Rhee Chang-yong, South Korea’s central bank governor, addressed the economic outlook, emphasizing that monetary policy would be managed with flexibility amid rising global uncertainties. The Bank of Korea, which recently implemented consecutive rate cuts for the first time since 2009, is set to announce its next interest rate decision later this month.
Australia’s S&P/ASX 200 showed resilience, rising by 0.49%. Meanwhile, Japanese markets remained closed for the rest of the week due to the holiday period.
Singapore’s GDP Growth Accelerates
Investors also analyzed Singapore’s economic performance. Preliminary data showed that Singapore’s economy expanded by 4.3% year-on-year in the fourth quarter of 2024, a slowdown compared to the 5.4% growth recorded in the third quarter. However, annual GDP growth for 2024 stood at 4%, a significant improvement from the 1.1% growth in 2023.
The Ministry of Trade and Industry stated that these GDP estimates are primarily based on data from the first two months of the quarter and may be revised when additional data becomes available.
U.S. Stock Futures Remain Steady
While Asian markets processed regional data, U.S. stock futures remained relatively stable. Futures tied to the Dow Jones Industrial Average were flat, while S&P 500 futures inched up by 0.06%, and Nasdaq 100 futures advanced by 0.17%.
U.S. stocks closed 2024 with strong gains, marking another year of robust performance. The S&P 500 posted an annual gain of over 20% for the second consecutive year, rising by 23.31% in 2024. The Dow Jones Industrial Average gained 12.88%, while the Nasdaq surged by 28.64%. These figures reflect the continued strength of the U.S. economy, even as global markets face varying challenges.
Outlook
Asian markets remain under pressure amid mixed economic signals. While Singapore’s GDP growth offers optimism, China’s manufacturing slowdown and uncertainties in South Korea underline the challenges facing the region. Investors will closely monitor upcoming data and central bank decisions to gauge the economic trajectory in the first quarter of 2025.
