Asian equities dropped with Chinese shares leading declines due to slowing economic data and the threat of higher US tariffs.
China’s benchmark stock gauge began the new year with losses after reports showed the nation’s manufacturing activity cooled in December.
MSCI’s gauge of Asian shares headed for its lowest close in almost two weeks. Financial markets in Japan remain closed until next Monday.
“Onshore sentiment seems to be deteriorating” due to the poor PMI data and recent dollar gains, said Zhaopeng Xing, senior China strategist at ANZ Bank China.
“Investors would like to pull back against possible US tariffs.” The declines in Asian equities came after the S&P 500 and Nasdaq 100 indexes both fell for a fourth day Tuesday in a year-end retreat that shaved more than a trillion dollars from US large-cap market values.
The dollar weakened against most of its major peers Thursday, while Treasury futures were little changed.
The risk-off sentiment reflects caution in what is the first trading day of the year for many markets around the world as geopolitical tensions simmer and traders begin to execute asset allocation strategies for 2025.
