Asia-Pacific markets displayed mixed results on Thursday, December 26, 2024, as trading was subdued due to the Boxing Day holiday in several regions. Singapore’s manufacturing data for November fell short of expectations, despite showing year-over-year growth. Meanwhile, Japan’s markets surged, fueled by optimism surrounding a record budget proposal, while South Korea saw a slump amidst domestic political turbulence.
Key Highlights
Singapore Manufacturing Output Falls Short of Forecasts
Singapore’s manufacturing sector recorded an 8.5% year-over-year increase in November, marking the fifth consecutive month of growth. This was primarily driven by the strong performance of the electronics sector. However, the growth figure was below Reuters’ forecast of 10%.
- On a month-on-month seasonally adjusted basis, the manufacturing output contracted by 0.4%, missing expectations of a 0.8% increase.
- The data reflects lingering challenges for Singapore’s manufacturing sector, which had been expected to show stronger momentum.
Japan’s Nikkei 225 Rallies on Record Budget Proposal
Japan’s Nikkei 225 rose by 1.12% to close at 8,220.9, while the broader Topix index gained 1.20%, closing at 2,766.78.
- The rally came after reports that the Japanese government is preparing a record $735 billion fiscal budget for 2025, aimed at addressing increased social security and debt-servicing expenses.
- Bank of Japan Governor Kazuo Ueda expressed confidence that Japan’s economy is moving closer to achieving sustainable 2% inflation by 2025, supported by wage increases.
- Japanese automakers Nissan and Honda saw significant gains of 6.58% and 3.84%, respectively, as merger talks between the two companies gained momentum.
South Korea’s Markets Decline Amid Political Uncertainty
South Korea’s Kospi fell 0.44% to close at 2,429.67, while the Kosdaq dropped 0.66% to 675.64.
- Political uncertainty weighed on market sentiment as the opposition Democratic Party submitted a bill to impeach acting President Han Duck-soo, with a vote expected on Friday.
- Despite the broader market downturn, retail giant E-Mart surged 5.45%, driven by reports that Alibaba Group Holding is finalizing a deal to merge its South Korean business with E-Mart’s e-commerce platform.
China’s Economic Outlook Improves
China’s CSI 300 index edged up to close at 3,987.48 after the World Bank revised its GDP growth forecast for the country.
- The World Bank now expects China’s economy to grow by 4.9% in 2024, up from its previous estimate of 4.8%. For 2025, the forecast has been raised to 4.5% from 4.1%.
- Efforts to stabilize the real estate market remain a priority for the Chinese government, with measures announced to optimize housing supply and control market declines.
Other Market Updates
- Australia, New Zealand, and Hong Kong markets remained closed for the Boxing Day holiday.
- In the U.S., markets were closed on Wednesday for Christmas, but stocks had rallied on Tuesday, marking the start of the seasonal “Santa Claus rally.” The S&P 500 rose 1.1%, the Dow Jones gained 0.91%, and the Nasdaq climbed 1.35%, fueled by a 7.4% jump in Tesla shares.
Looking Ahead
The mixed performances in Asia-Pacific markets reflect varying economic conditions and geopolitical developments across the region. While Japan’s optimism surrounding fiscal measures and inflation targets has fueled market gains, Singapore’s manufacturing data underscores the challenges faced by export-driven economies in a volatile global landscape. Investors will continue to monitor key developments, including South Korea’s political situation and China’s economic recovery, for further market direction.
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