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Markets Update: APAC Equity Markets Begin 2024 Mixed; Japan Closed for Holiday; USD Generally Rises, UST FUTs Decline Post Holiday.
Economic Calendar
Global Markets Roundup: 02 Jan 2024
Overview
Asian equity markets began the new year on a mixed note, with China's PMI data providing mixed signals. The Shanghai Composite index fell slightly, while the Hang Seng index rose modestly. The (DXY) dollar strengthened against most currencies, while US Treasury futures declined.
Key Developments
China's Manufacturing and Non-Manufacturing PMIs: China's manufacturing PMI for December came in at 49.0, below expectations of 49.6 and marking the third month of contraction. The non-manufacturing PMI, however, rose to 50.4, the highest level since August and indicating continued expansion in the services sector.
Maersk Hangzhou Struck by Missile: Maersk's Hangzhou container ship was struck by a missile in the Red Sea, according to the US Pentagon. The incident has caused Maersk to pause all sailings through the Red Sea for 48 hours.
ASML to Stop Sales to Some Chinese Customers: Semiconductor equipment maker ASML has had its license to export certain products to China partially revoked by the Dutch government. The decision is a result of US pressure on the Netherlands to block sales to China of equipment that could be used to develop advanced chips.
Joyy Receives Termination Notice from Baidu: Joyy, a Chinese entertainment company, has received a notification from Baidu's affiliate purporting to terminate the Share Purchase Agreement. The notification is the latest development in a long-running dispute between the two companies.
Israeli Troops Shifting Out of Gaza: Thousands of Israeli soldiers are being withdrawn from the Gaza Strip, the first significant drawdown of troops since the recent war began. The withdrawal is a sign of progress in the ceasefire talks between Israel and Hamas.
Nokia Misses 2023 Outlook: Nokia has announced that it does not expect to achieve its 2023 financial outlook. The company cited licensing renewal discussions that are expected to continue into 2024 as the reason for the miss.
Market Reaction
The mixed data from China's PMIs weighed on Chinese stocks, with the Shanghai Composite index falling slightly. However, the Hang Seng index rose modestly, supported by gains in property and technology stocks. The dollar strengthened against most currencies, as investors sought safe-haven assets amid geopolitical uncertainty. US Treasury futures declined as investors sold off bonds after a strong holiday performance.
Levels as of 06:20 GMT
- Nikkei 225, closed, ASX 200 +0.5% , Hang Seng -1.5%; Shanghai Composite -0.2% ; Kospi +0.7%
- Equity S&P500 Futures: +0.1%; Nasdaq100 -0.1%, Dax +0.2%; FTSE100 +0.2%
- EUR 1.1045-1.1016 ; JPY 141.67-140.81 ; AUD 0.6828-0.6802 ;NZD 0.6337-0.6293
- Gold +0.4% at $ 2,080/oz; Crude Oil +1.7% at $72.84/brl; Copper +0.2% at $3.9010/lb
Looking Ahead
Investors will be looking to the release of US retail sales data for December on Wednesday for further direction. The data is expected to show a strong increase, which could boost investor confidence and support risk appetite. Overall, the outlook for Asian markets is mixed. The PMI data from China has raised concerns about the health of the Chinese economy, while geopolitical tensions remain elevated. However, the strong performance of the dollar and US Treasury futures suggests that investors are still willing to take on risk.
Additional Notes
The earthquake off the coast of Japan has caused some damage, but the overall impact on the economy is expected to be limited.
South Korea's President Yoon has called for an end to the financial investment income tax, which could boost sentiment in the country's stock market.
India has raised the windfall tax on domestic crude oil, which could put upward pressure on oil prices.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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