Asian stock markets displayed mostly positive movements on Thursday in the aftermath of the Christmas holiday. Trading volumes remained light as several major markets, including Hong Kong, Australia, New Zealand, and Indonesia, were closed.
The spotlight was on Japan, where the Nikkei 225 index rose 0.8% to reach 39,449.55. Retail and tourism-related stocks spearheaded the rally following Japan’s announcement to relax visa restrictions for Chinese tourists.
- Major Winners in Japan:
- Isetan Mitsukoshi Holdings: Gained 7%
- J. Front Retailing Co.: Rose 8.8%
Automakers also saw significant gains, boosting overall market sentiment.
Meanwhile, South Korea’s Kospi experienced a slight decline, slipping less than 0.1% to 2,438.85. Taiwan’s Taiex gained 0.2%, and China’s Shanghai Composite edged 0.1% higher to close at 3,395.41.
Thailand’s SET Index increased modestly by 0.1%, continuing the region’s largely positive trend.
Key Developments Impacting Markets
Japan-China Dialogue
In a significant geopolitical development, Japanese Foreign Minister Takeshi Iwaya held talks with Chinese Premier Li Qiang and Foreign Minister Wang Yi in Beijing. Discussions focused on addressing contentious security issues and other sources of bilateral friction. These talks are expected to foster a more stable economic environment, which is particularly relevant given the intertwined nature of the two economies.
U.S. Market Momentum
While Asian markets gained, the U.S. stock market remained closed on Wednesday but reopened Thursday, with anticipation centered on the latest unemployment benefits data. On Tuesday, U.S. markets benefited from a traditional “Santa rally.”
- S&P 500: Gained 1.1%
- Dow Jones Industrial Average: Rose 0.9%
- Nasdaq Composite: Climbed 1.3%
Historically, the last five trading days of the year and the first two of the new year bring an average gain of 1.3% since 1950. This trend provided a favorable backdrop for Tuesday’s shortened session.
Energy Markets and Currency Movements
Oil prices also advanced in early Thursday trading, contributing to broader market optimism:
- U.S. Benchmark Crude Oil: Up 27 cents to $70.37 per barrel
- Brent Crude: Gained 24 cents to $73.31 per barrel
In currency markets, the dollar rose to 157.43 Japanese yen from 157.19 yen, while the euro slipped slightly to $1.0401 from $1.0410.
The U.S. Market in 2024: A Strong Year Despite Challenges
The U.S. market is on track for an exceptional year, with the benchmark S&P 500 up 26.6% year-to-date. The index remains within 1% of its all-time high set earlier this month, marking its 57th record high in 2024.
Factors Contributing to U.S. Market Performance
- Tech Rally: Big Tech stocks drove much of the year’s gains, benefiting from strong earnings and innovation in artificial intelligence and green technologies.
- Economic Optimism: Hopes for robust economic growth fueled by corporate investments and favorable policy measures sustained positive sentiment.
- Volatility Concerns: While gains have been substantial, fears surrounding tariffs, inflation, and rising government debt created moments of market uncertainty.
Outlook for Global Markets
As 2024 comes to a close, investors remain cautiously optimistic. The strong performance of Asian and U.S. markets reflects underlying economic resilience, despite geopolitical tensions and inflationary pressures.
With upcoming data releases, including U.S. unemployment benefits updates and corporate earnings reports, the final days of the year promise critical insights into what 2025 might hold for global financial markets.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a financial professional before making investment decisions.
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