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Asian stocks eye weak open on Wall Street losses

Tan KW
Publish date: Tue, 31 Dec 2024, 09:44 AM
Tan KW
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 Asian shares are poised to open lower, after stocks extended losses for a third day on Wall Street due to weakness in the tech sector. 

Stock futures pointed to early losses in Australia and Hong Kong, following declines for both the S&P 500 and the Nasdaq 100. US contracts also fell in Asia.

The Bloomberg Dollar Spot Index is on track for its best year since 2015. Treasuries rallied on Monday, with the 10-year yield hovering around 4.53%. Japanese financial markets are closed from Tuesday through Jan. 6.

Yields had declined further after Chicago Purchasing Managers’ Index data showed an unexpected decline. Data on Monday also showed pending sales of US homes increasing for a fourth month in November to the highest level since early 2023.

This year, the so-called Magnificent Seven cohort of US tech giants has driven an advance of more than 20% in the S&P 500, while prompting some to worry that the gains are too concentrated in a small group of names. Still, few are calling for the rally to end and none of the 19 strategists tracked by Bloomberg expects the S&P 500 to decline next year.

“In these moments, it’s best to stay put,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The US remains the place to be. Growth stocks continue to outperform and earnings forecasts are good, so there are good reasons to remain optimistic.”

Elsewhere, Europe’s Stoxx 600 index retreated, while Asian stocks snapped five days of gains in the previous session. Trading volumes were thinner because of the holiday season.

“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.”

It’s the final session of 2024 for some markets including Germany, where the DAX benchmark saw a 19% annual advance.

Among commodities, oil edged higher as traders focused on 2025 risks. US natural gas futures soared as the weather outlook for January shifted colder. Gold is set for a blockbuster year.

The New York Stock Exchange, Nasdaq Inc.’s US equities exchanges and Cboe Global Markets Inc. will close Jan. 9, in observance of a national day of mourning for Jimmy Carter, the 39th president of the US, who died Sunday.

CME Group Inc., operator of US-based equity and interest-rates markets, had not yet commented on its plans. The bond market will close at 2 p.m. New York time, per the recommendation of the Securities Industry and Financial Markets Association.

CME Group said its equities derivatives market will start trading as usual at 6 p.m. in New York on Jan. 8 and close at 9:30 a.m. the following morning. Stock futures trading will resume at 6 p.m. on Jan. 9.

 


  - Bloomberg

 

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