Asia Shares Start 2025 Unevenly Amid Focus on Trump’s Policies
Asian markets opened the new year on shaky ground as investors eye Trump’s return to power and its potential impact on the economy
Asia, Trump, China, Singapore, Economy, Stocks
Singapore: Asian stocks kicked off 2025 on a rough note. After a shaky end to 2024, investors are feeling cautious. The U.S. dollar is on the rise, and everyone’s keeping an eye on Donald Trump’s return to the White House.
It looks like the start of the year isn’t great for stocks. There’s a lot of uncertainty about what Trump’s policies will mean for the economy. Plus, the Federal Reserve seems to be taking a tougher stance, which isn’t helping either.
Even though global shares had a solid year in 2024, wrapping up with a nearly 16% gain, December wasn’t kind. Many markets, including Asia-Pacific shares, took a hit, with a 1.2% drop last month.
In early trading, the MSCI index for Asia-Pacific shares outside Japan was down 0.5%. With Japan on holiday, trading volume was pretty low.
Market analyst Tony Sycamore mentioned that we’re in a bit of a waiting game until Trump’s inauguration on January 20. It’s unusual for stocks to not rally in December, which raises some red flags.
Chinese stocks also opened lower, with the CSI300 index down 1.43% and the Shanghai Composite Index losing 1%. Hong Kong’s Hang Seng Index fell 1.74% as well.
Investors are watching China’s economic recovery closely. Officials have promised support measures, but Trump’s talk of hefty tariffs on Chinese goods could complicate things.
Yingrui Wang, an economist, pointed out that China might struggle if stimulus measures are delayed or mismanaged, especially with Trump back in power.
Meanwhile, South Korea’s KOSPI index dipped slightly. It had a rough 2024, losing over 22% due to political issues.
With all this uncertainty, the dollar is gaining strength. The difference in interest rates between the U.S. and other countries is making currencies drop against the dollar.
The dollar rose to 157.43 yen, nearing a five-month low for the Japanese currency. The euro and sterling also saw slight changes but remained close to recent lows.
Markets are expecting fewer interest rate cuts from the Fed this year compared to other central banks, which is adding to the dollar’s strength.
In commodities, oil prices are inching up, and gold is also seeing a boost after a fantastic year in 2024.