China’s largest policy conference in six years begins this week.
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Chinese stocks widened their decline on Friday after a rocky start to the new year, despite gains across the Asia-Pacific region as investors assessed policy signals from the Chinese government.
Mainland China’s benchmark CSI300 index fell 1.18% in volatile trading, extending the previous day’s 2.9% decline to close at 3,775.16480. Hong Kong’s Hang Seng Index was up 0.42% at the close of trading.
Chinese government bond yields hit record lows, with the 10-year bond yield down 1.5 basis points to 1.598% and the 30-year bond yield down 2.9 basis points to 1.819%, according to LSEG data. It became.
The People’s Bank of China plans to cut interest rates “at an appropriate time” this year, the Financial Times reported, citing the central bank. The country’s seven-day reverse repo rate is currently set at 1.5%.
China will increase its issuance of ultra-long-term bonds over the next year and step up efforts to boost consumption, senior officials from China’s National Development and Reform Commission told reporters on Friday.
Officials reiterated plans to increase support for job training, pensions and gig economy workers, while subsidizing the purchase of smartphones, smartwatches and tablets.
Separately, China’s Ministry of Commerce has proposed imposing export restrictions on certain technologies used to manufacture battery components and process critical minerals such as lithium and gallium, according to a notice released Thursday. .
According to Yonhap News, Asian investors will continue to monitor political uncertainty in South Korea. South Korea’s corruption watchdog was unable to detain impeached President Yun Seok-Yeol after an hours-long standoff at the presidential palace. Yun briefly attempted to impose martial law on Dec. 3, but it sparked political turmoil in the country.
However, the Korean market seemed to have shaken off the political turmoil, with the Kospi index rising 1.79% to close at 2,441.92, and the small-cap Kosdaq also rising 2.79% to 705.76. SK Hynix’s stock price rose 6.25% after the company announced that it will announce plans to position itself as a “full-stack AI memory provider” at the Consumer Electronics Show 2025 next week.
Australia’s S&P/ASX 200 rose 0.60% to settle at 8,250.50.
Japanese markets remained closed due to the holiday.
The three major US indexes ended the first session of the new year lower, extending the slump until the end of 2024 and suggesting that the market may not experience a “Santa Claus rally” this year.
Investors were anticipating a “Santa Claus Rally” spanning the last five business days of the year and the first two business days of next January. Dow Jones market data dating back to 1950 shows that during this period, the S&P 500 index rose an average of 1.3% and rose nearly 80% of the time.
At night, the blue-chip Dow Jones Industrial Average fell 151.95 points, or 0.36%, to end at 42,392.27, while the S&P 500 index fell 0.22% to 5,868.55 and the tech-heavy Nasdaq Composite Index fell 0.16%. It fell to 19,280.79.
This resulted in the S&P 500 and Nasdaq falling into the red for five consecutive sessions, the longest losing streak since April. Big tech stocks weighed on the market, with Apple falling 2.6% and Tesla falling 6% due to a decline in annual car deliveries.
—CNBC’s Evelyn Cheng, Jesse Pound and Christina Cheddar Berk contributed to this report.
