Asian Markets Face Decline Amid Investor Caution

TOKYO (AP) — Asian shares experienced a decline on Thursday, largely due to the Tokyo stock market remaining closed for the New Year’s holidays.

Investor sentiment remained tepid as concerns grew regarding potential policy shifts from President Donald Trump, coupled with political uncertainty in South Korea, leading to a cautious wait-and-see approach.

In early trading, Australia’s S&P/ASX 200 index saw a modest increase of 0.4%, reaching 8,193.90. Conversely, South Korea's Kospi fell nearly 0.1%, settling at 2,397.54. The Hang Seng index in Hong Kong saw a drop of 1.3%, closing at 19,807.19, while the Shanghai Composite index dropped by 0.8% to 3,325.56.

Investors were also mindful of the U.S. stock market, which was closed on Wednesday in observance of New Year’s Day. However, on Thursday, attention was drawn to the upcoming U.S. construction spending data for November, and manufacturing statistics set to be unveiled on Friday.

Notably, the New York Stock Exchange and Nasdaq plan to close their equity and options markets on January 9 to honor former President Jimmy Carter. He passed away at the age of 100 on Sunday, marking a significant moment in U.S. history.

This week, the U.S. stock indices finished mostly lower on Tuesday, wrapping up another year of remarkable growth. The S&P 500 index experienced an early gain but ultimately fell 0.4%. Despite this minor setback, the S&P 500 reached a notable 23.3% gain for the year, marking its second consecutive year with over a 20% increase. This level of back-to-back annual gains hasn’t been seen since 1998.

The Dow Jones Industrial Average saw a slight decline of 0.1%, while the Nasdaq composite registered a more significant loss of 0.9%. Major technology stocks were drivers of this year’s rally, propelling the Nasdaq to a 28.6% annual increase, in contrast to the Dow's more conservative 12.9% rise.

The S&P 500 index concluded the day by dropping 25.31 points to close at 5,881.63. The Dow concluded at 42,544.22 after losing 29.51 points, while the Nasdaq dipped by 175.99 points, finishing at 19,310.79.

The robust performance of the U.S. stock market has been attributed to a favorable economy, strong consumer spending, and a positive labor market. Significant gains in the artificial intelligence sector, especially among companies like Nvidia, have further propelled market growth.

After responding to three interest rate cuts in 2024, the Federal Reserve has indicated a more cautious stance moving into 2025, especially amid persistent inflation concerns as Donald Trump prepares for his presidency. His proposals to increase tariffs on imports have raised anxiety about a potential resurgence of inflation as businesses may pass on tariff costs to consumers.

In the energy sector, U.S. crude oil prices climbed by 36 cents, reaching $72.08 a barrel. Meanwhile, Brent crude increased by 34 cents, closing at $74.98 a barrel.

On the currency exchange front, the U.S. dollar experienced a slight decrease, costing 157.28 Japanese yen, slightly down from 157.24 yen previously. The euro gained value, trading at $1.0373, up from $1.0361.

Asian, Shares, Investors, Economy, Decline