SINGAPORE (AP) — Asian markets declined Monday, with the MSCI Asia Pacific Index ending a five-day winning streak amid thin holiday trading and following losses on Wall Street, as investors reduced risk exposure ahead of the new year.
Trading volumes remained subdued, with Japanese stocks showing 17% below their 30-day average and Australian volumes 51% lower. Monday marks the final trading day for Japanese markets before closing until January 6 for public holidays.
“There’s a little bit of trepidation heading into year-end, owing in part to uncertainty over how the international trade picture may take shape in 2025,” said Tim Waterer, chief market analyst at Kohle Capital Markets Pty. “Some traders are taking risk off the table heading into year-end, which is leading to weakness on Asian bourses.”
Despite Monday’s losses, Asian shares are poised for a successful year, with the MSCI Asia Pacific gauge up 7.5% in 2024, driven by monetary policy easing and technology sector gains amid artificial intelligence optimism.
In South Korea, Jeju Air shares plunged 16% to a record low following Sunday’s deadly crash that killed 179 people. Parent company AK Holdings fell 12%, reflecting investor concerns about potential financial and reputational impacts.
Treasury yields edged lower, with 10-year yields dropping one basis point to 4.62% after reaching 4.64% last week. The decline follows the Federal Reserve’s recent signals suggesting fewer interest-rate cuts in 2025 than previously anticipated.
The Bloomberg Dollar Spot Index remained stable Monday after gaining more than 7% in 2024, influenced by anticipated “America First” policies under President-elect Trump. The Australian dollar strengthened against all G-10 peers, boosted by rising iron ore prices.
U.S. markets showed significant weakness Friday, with the S&P 500 falling 1.1% and the Nasdaq 100 dropping 1.4%, led by declines in technology stocks. The “Magnificent Seven” tech giants, which drove more than half of the S&P 500’s 2024 gains, faced particularly strong selling pressure.
“The combination of year-end positioning and uncertainty about global trade policies is creating some market anxiety,” said Sarah Chen, market strategist at Morgan Stanley. “However, the underlying fundamentals remain supportive of continued growth in 2025.”
