Source: AFP
Asian markets slipped on Tuesday as most traders returned from the New Year break looking ahead to a 2024 that is expected to see a series of rate cuts from the US Federal Reserve but also be fraught with economic and political uncertainty.
After a successful run over the past two months, Wall Street stuttered last week, although analysts are hoping for a fresh rally as US monetary policy eases.
The next few days will provide fresh insight into the outlook for interest rates, with the release of minutes from the Fed’s December meeting, followed by job creation data.
Indications from the bank that it would cut rates three times next year have lit a cap on stocks as fears of inflation and recession give way to hopes of a strong period ahead.
“There is a growing belief that the Fed’s rate cuts, which have buoyed all capital market trends over the past eight weeks, are still fully entrenched in stock market sentiment,” said Stephen Innes of SPI Asset Management.
![](https://images.yen.com.gh/images/177191cfb66d920b.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/177191cfb66d920b.jpg?impolicy=cropped-image&imwidth=256)
Read also
China’s Xi hails ‘resilient’ economy in bullish New Year speech
“While a stronger-than-expected jobs report could shake that belief, a reversal would require a resurgence in realized inflation, sparking a significantly more aggressive stance from (Fed chief Jerome) Powell and other key figures to discourage March or May rate cuts. bets”.
He added that there is a question of how investors will reconcile the difference between market expectations of 150 basis point cuts and the Fed’s forecast of 75.
Despite the upbeat outlook for interest rates, Asian markets started the year with little fanfare, with Hong Kong and Shanghai extending their losses into 2023.
There was little boost from a speech in which Chinese President Xi Jinping said the economy had become “more resilient and dynamic”.
Observers warned that while Beijing has pledged a number of measures to jump-start growth, much more is needed to instill confidence, particularly in the property sector.
![](https://images.yen.com.gh/images/931dc5867a643c38.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/931dc5867a643c38.jpg?impolicy=cropped-image&imwidth=256)
Read also
Asian stocks open cautiously on the last trading day of the year
There were also losses in Seoul, Singapore, Taipei and Jakarta, although Sydney and Manila rose.
Tokyo was closed for a holiday, although investors were watching developments in Japan, a day after a massive earthquake that Prime Minister Fumio Kishida said had caused “extensive” damage and many casualties.
All tsunami warnings from that earthquake were lifted on Tuesday.
Oil prices jumped more than one percent after Iran sent a warship to the Red Sea in response to the US Navy’s destruction of three Houthi vessels.
Tehran’s move comes as tensions remain high in the waterway, where Yemeni rebels have launched attacks on several international container ships, prompting some companies to stop using it and fueling supply concerns.
However, some shipping companies have resumed the crossing following efforts by a US-led naval coalition to police the sea route.
Keys around 02:30 GMT
Hong Kong – Hang Seng Index: DOWN 1.2 percent at 16,838.94
![](https://images.yen.com.gh/images/32195723611c60ad.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/32195723611c60ad.jpg?impolicy=cropped-image&imwidth=256)
Read also
Core US inflation rate eases in November as interest rate cut looms
Shanghai Composite: DOWN 0.1 percent at 2,972.45
Tokyo – Nikkei 225: Closed due to holiday
Dollar/yen: UP to 141.38 yen from 141.01 yen
EUR/USD: DOWN to $1.1029 from $1.1040
GBP/USD: DOWN to $1.2722 from $1.2738
Euro/pound: UP to 86.68 pence from 86.63 pence
West Texas Intermediate: UP 1.3 percent to $72.60 a barrel
North Sea Brent crude: UP 1.4 percent at $78.09 a barrel
New York – Dow: DOWN 0.1 percent at 37,689.54 (close)
London – FTSE 100: UP 0.1 percent at 7,733.24 (close)
Source: AFP