Asia report: Markets mixed on return from New Year holiday

(Sharecast News) - Asian markets traded mixed on Thursday, with Chinese equities leading losses after disappointing manufacturing data.

Several major markets resumed trading following the New Year's holiday, while Japan and New Zealand remained closed.

"Asian Pacific stock indices were mixed overnight, with outsized losses across Chinese indices," said David Morrison, senior market analyst at Trade Nation.

"This followed the release of another disappointing Manufacturing PMI, even though the services sector continues to show expansion at a better-than-expected rate.

"It was a similar situation across Europe which had to deal with a dismal set of manufacturing PMIs."

Morrison noted that it was a cheerier picture for US stock index futures, which were noticeably stronger in early trade.

"Tech stocks are firmer and bond yields are a tad softer, although the 10-year Treasury yield remains above 4.50%.

"Investors appear to be taking advantage of last month's pullback across the 'Magnificent Seven' to buy in at slightly cheaper levels.

"The question for the next few weeks seems to be whether the recent pickup in bond yields is due to concerns of future inflationary pressures, fanned by Trump's tariff threats, or for the more benign expectation of stronger economic growth ahead."

Markets mixed on return from New Year's holiday

In China, the Shanghai Composite fell 2.66% to 3,262.56, and the Shenzhen Component dropped 3.14% to 10,088.06 as China's December Caixin manufacturing PMI came in below expectations, signalling a slowdown in industrial activity.

Leading decliners in Shanghai included Huaihe Energy Group, Neusoft Corporation, and Harson Trading China, all shedding over 10%.

Hong Kong's Hang Seng Index declined 2.18% to 19,623.32, with major losses from Semiconductor Manufacturing International Corporation (SMIC), Xinyi Solar Holdings, and JD Health International.

In contrast, South Korea's Kospi 100 rose marginally by 0.01% to 2,395.74, supported by gains from Doosan Robotics, which surged 28.11%, LIG Nex1, and Hyundai Glovis.

Australian markets also ended higher, with the S&P/ASX 200 gaining 0.52% to close at 8,201.20.

Key contributors in Sydney included Mesoblast, Spartan Resources, and Paladin Energy, which rose 8.07%, 4.61%, and 4.37%, respectively.

In currency markets, the dollar was last down 0.04% on the yen to trade at JPY 157.18, as it weakened 0.44% against the Aussie to AUD 1.6092, and lost 0.32% on the Kiwi, changing hands at NZD 1.7818.

Oil prices rose, with Brent crude futures last up 1.47% on ICE to $75.74 per barrel, and the NYMEX quote for West Texas Intermediate gaining 1.55% to $72.83.

Manufacturing growth eases in China, Singapore economic growth picks up

In economic news, China's manufacturing growth eased in December, with the Caixin/S&P Global manufacturing purchasing managers' index (PMI) falling to 50.5, below the 51.7 forecast in a Reuters poll.

The figure also marked a decline from November's 51.5 reading, indicating a marginal pace of expansion.

It put the slowdown down to weaker export demand amid uncertainties in the global trade environment.

Wang Zhe, a senior economist at Caixin Insight Group, noted that overseas economic pressures weighed on demand.

The official PMI, released earlier in the week, was even lower at 50.1, also missing expectations.

Meanwhile, Singapore's economy grew 4% in 2024, accelerating from 2023's modest 1.1% expansion, according to preliminary data.

However, fourth-quarter growth slowed to 4.3% year-on-year, down from 5.4% in the previous quarter, based on advance estimates from the Ministry of Trade and Industry.

Reporting by Josh White for Sharecast.com.