Investing.com– Asian stocks were largely subdued on Tuesday tracking overnight losses on Wall Street amid thin trading volumes at year-end, while investors assessed the Chinese manufacturing activity data.
Trading volumes were thin with most major indexes shut for the year-end holiday. Stock markets in Japan, South Korea, and Thailand were closed on the last trading day of the year, while Hong Kong, Philippines, Australia, and New Zealand will see a shortened trading session for the day.
U.S. stock index futures were slightly lower in Asian trade on Tuesday, after Wall Street fell sharply with tech stocks dipping amid profit-taking on Monday.
Chinese stocks fall as manufacturing activity expands at a slower pace
China’s and indexes fell 0.4% each, on Tuesday.
In contrast, Hong Kong’s index was 0.7% higher.
China’s expanded for a third straight month in December as a raft of fresh stimulus measures continued to provide support, purchasing managers index data showed on Tuesday. data showed on Tuesday.
However, the rise was slightly lower than market expectations and below the previous month’s reading. This sparked concerns about the long-term industrial health of the world’s second-largest economy, which has been suffering from an economic slowdown and a beleaguered property sector.
Markets are holding out for more clarity on Beijing’s plans for stimulus measures in the coming year. Recent reports suggested that the country will ramp up fiscal spending to support economic growth.
In Australia, China’s largest trading partner, the index fell 0.9%.
India’s were 0.2% lower on Tuesday, while Singapore’s was largely unchanged.
Malaysia’s index inched 0.1% lower.
South Korean political crisis deepens
South Korean markets were closed on Tuesday. The index has recorded four consecutive declines since Monday.
A South Korean court approved an arrest warrant on Tuesday for President Yoon Suk Yeol, who has been impeached and suspended from office following his December 3 decision to impose martial law, according to investigative authorities.
The Corruption Investigation Office for High-ranking Officials (CIO) stated that the Seoul Western District Court granted the warrant sought by investigators probing Yoon’s brief imposition of martial law.
Asia stocks dropped on Monday as thin trading volumes and concerns over China’s slower manufacturing expansion weighed on investor sentiment.
China’s official manufacturing Purchasing Managers’ Index (PMI) fell to 50 in October, the lowest level since February 2020. This was below analysts’ expectations of a reading of 50.6, indicating a slowdown in the country’s economic recovery.
The news weighed on Asian stocks, with Japan’s Nikkei 225 down 1.2%, Hong Kong’s Hang Seng Index falling 1.5%, and South Korea’s KOSPI dropping 0.8%.
Investors are also closely watching the ongoing supply chain disruptions and rising inflationary pressures, which could further dampen economic growth in the region.
Despite these challenges, some analysts remain optimistic about the long-term outlook for Asian stocks, citing strong corporate earnings and government stimulus measures as potential drivers of future growth.
However, in the short term, the uncertainty surrounding China’s economic growth and the global supply chain issues are likely to continue to weigh on investor sentiment in the region.
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