(Bloomberg) — Chinese stocks dragged down Asian stocks on the first trading day of the year, following weaker-than-expected factory data and President Xi Jinping’s speech highlighting the headwinds facing the economy. Oil prices rose.
Most Read Articles on Bloomberg
Hong Kong’s benchmark share gauge fell as much as 1.7%, while peers on the mainland and Taiwan also fell. The losses pushed regional stock benchmarks toward their first seven-day decline.
China’s factory activity shrank to its lowest level in six months in December, data released Sunday showed, although a private manufacturing index released Tuesday showed a slight increase. The slowdown in economic activity in the world’s second-largest economy also led to a slump in factories across Asia.
In his annual televised New Year’s address on Sunday, President Xi pledged to strengthen economic momentum and job creation, but some businesses are struggling and people are struggling to find work and pay for basics. admitted that it was difficult to meet their needs.
Mark Matthews, head of Asia research at Julius Baer, said the Chinese economy could face another tough year in 2024. “President Xi has made it clear that on the economic front, his priority is to reduce the size of the real estate sector and its importance in the economy,” he said on Bloomberg TV. “The process is painful.”
gross profit
After the U.S. Navy destroyed three Houthi ships over the weekend, Iran sent warships to the Red Sea to obtain oil, a move that further escalated tensions and threatened to disrupt a waterway vital to global trade. This risks complicating the United States’ goal of securing security.
Sentiment in the Asian region also worsened after sources said that ASML Holding NV, which manufactures semiconductor manufacturing equipment, canceled shipments of some machinery to China at the request of US President Joe Biden’s administration. I let it happen.
US stock futures were little changed. The yen fell against the Group of Ten (G10) countries in thin trading as investors closely watched the situation after Monday’s earthquake in Japan. US 10-year bond futures are down and cash government bonds are closed in Asia due to Japan’s holiday. Australian government bonds fell.
Bitcoin has soared above $45,000 for the first time in nearly two years as hopes grew for approval of an exchange-traded fund (ETF) that invests directly in the largest token.
increasing risk
After the S&P 500 soared more than $8 trillion last year, there are signs of depletion. Traders have focused on Federal Reserve uncertainty, recession fears and geopolitical risks. And many who entered 2023 fearing everything ended up scrambling to chase the bull market.
“A combination of these factors, especially with the S&P’s rare nine-week winning streak already confirmed, resistance index near the 4,800 level, and daily and weekly overbought readings. Some consolidation, correction, or exit – something,” 22V Research technical analyst John Roque wrote in a note.
Meanwhile, some investors believe the nearly 60% drop is a signal to buy Chinese stocks, even as China’s economy continues to slump. Almost a third of 417 respondents to Bloomberg’s latest Markets Live Pulse survey said they would increase their investment in China over the next 12 months. This is higher than the 25% who planned to increase their exposure in March, compared to just 19% in a similar August survey.
This week’s main events:
Eurozone S&P World Eurozone Manufacturing PMI, Tuesday
UK S&P Global UK Manufacturing PMI, Tuesday
German unemployment rate Wednesday
US FOMC Minutes, ISM Manufacturing, Recruitment, Light Vehicle Sales, Wednesday
Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks Wednesday
China Caixin releases PMI on Thursday
Eurozone S&P Global Eurozone Services PMI, Thursday
U.S. new jobless claims, ADP employment, Thursday
Eurozone CPI, PPI, Friday
US non-farm payrolls/unemployed, factory orders, ISM services index, Friday
Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks on Friday
The main movements in the market are:
stock
As of 2:14 p.m. Tokyo time, S&P 500 futures were little changed. The S&P 500 fell 0.3% on Friday.
Nasdaq 100 futures were little changed.Nasdaq 100 fell 0.4%
Hong Kong’s Hang Seng Index fell 1.4%.
China’s Shanghai Composite Index fell 0.1%.
Australia’s S&P/ASX 200 index rises 0.5%
currency
Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.2% to $1.1025.
The Japanese yen fell 0.4% to 141.46 yen to the dollar.
The offshore yuan was almost unchanged at 7.1290 yuan to the dollar.
The Australian dollar rose 0.2% to $0.6828.
cryptocurrency
Bitcoin rose 4% to $45,353.99
Ether rose 2.2% to $2,390.83
bond
merchandise
West Texas Intermediate crude rose 1.7% to $72.85 per barrel.
Spot gold rose 0.4% to $2,071.68 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Joanna Ossinger.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP