The Asian markets kicked off the new year on a somewhat mediocre note. Financial analysts attributed this lacklustre performance to weaker factory data and President Xi Jinping’s speech highlighting the current and anticipated economic challenges.
Chinese stocks hobble Asian equities as 2024 trading kicks off
Bloomberg reported that Hong Kong’s yardstick for shares dropped by approximately 1.5%. Experts noted the same slide in Taiwan and China. These markets took a further knock when ASML Holdings (ASML), a manufacturer of semiconductors, cancelled several shipments following an alleged request by the Biden Administration.
Records show that China’s factory operations dipped to a 6-month low in December 2023. A private survey made public on Tuesday, 2 January, indicated that the pace of manufacturing activities was marginally better.
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Although focusing on opportunity and promises of bolstering economic momentum, the Chinese president conceded that businesses went through a challenging time and many people struggled with employment and the costs of basic living. In a Bloomberg television interview, the head of research at Julius Baer, Mark Matthews, said:
President Xi has made it very clear that on the economic front, his priority is bringing down the size of the property sector and its importance in the economy. That process is painful.
Other socio-political factors impacting the Asian markets are the rise in oil prices after Iran moved a warship into the Red Sea. This came in response to the US Navy’s destruction of three Houthi boats. Analysts carefully watch these developments as this canal plays an important role in world trade.
The yen also displayed diluted performance against all of its Group-of-10 peers as the ripples of the Japan earthquake continues to influence financial performances.
