BANGKOK — Global stock markets showed mixed signals on Monday, with U.S. shares edging away from fresh record highs. Many Asian markets remained closed for the holidays, limiting the overall impact.
European Markets Sizzle, Then Sputter
Germany’s DAX dipped 1.1% to 21,178.37, while France’s CAC 40 declined 0.8% to 7,863.70. Britain’s FTSE 100 modestly fell 0.3% to 8,473.33, reflecting a broader pullback evident in European exchanges.
U.S. Future Markets Retreat
Futures markets hinted at a cautious start in the U.S., with the S&P 500 dropping 1.6% and the Dow Jones Industrial Average shedding 0.9%. This pullback comes after the indices reached all-time highs during the previous week.
Chinese AI Breakthrough Propels Hong Kong Stocks
Stocks in Hong Kong rose on news of DeepSeek, a Chinese AI firm. The company’s open-source AI model reportedly requires less investment, leading investors to reallocate funds away from U.S. and Japanese tech sectors toward Chinese equivalents.
The Hang Seng index gained 0.7% to 20,197.77, supported by robust gains in shares of Alibaba (2.9%) and Baidu (4.9%).
Shanghai Composite Reports Marginally Lower
In a counterpoint, the Shanghai Composite slipped 0.1% to 3,250.60, mirroring a decline in Chinese export orders, which dropped to a five-month low. The official manufacturing purchasing managers index fell to 49.1 in January, reversing from December’s 50.1 and indicating contraction.
Economist Zichun Huang from Capital Economics suggests this slowdown might be temporary, citing government stimulus measures and the New Year’s holiday effect on industrial output.
Tokyo Nikkei Slides Following Rate Hike
Tokyo’s Nikkei 225 also decreased by 0.9% to 39,565.80, due to the Bank of Japan’s interest rate hike to 0.25%, its highest level since 2008.
Forex Rates Relatively Stable
The U.S. dollar stayed consistent against the Japanese yen, fluctuating to 155.45 yen, down slightly from 155.72. The euro dipped to $1.0477 from $1.0483.
ASEAN Markets Reflect Global Trends
In Bangkok, the SET index retreated 0.7%. Other Asian markets remained closed for public holidays, suggesting a subdued immediate impact from global market developments.
U.S. Market Context
On Friday, U.S. stocks corrected from all-time highs, ending a two-week winning streak. The S&P 500 fell by 0.3% to 6,101.24, while the Dow Jones Industrial Average and Nasdaq composite dipped 0.3% and 0.5%, respectively.
Markets appeared steady amid concerns over inflation and government debt, factors that have historically impacted stock prices through government bond yield fluctuations. Encouraging economic data last week on inflation helped stabilize treasury yields and bolster investor confidence.
An encouraging earnings season for major U.S. companies also supported market gains, highlighting the resilience of corporate earnings amid broader economic uncertainties.
Oil Prices Experience Minor Decline
Oil prices experienced slight declines. U.S. benchmark crude oil shed 25 cents to $74.41 per barrel, while Brent crude, considered the international standard, lost 29 cents to $77.26.
Interest Rate Outlook: No Immediate Cuts Expected
Despite weak economic data, traders do not anticipate the Federal Reserve to reduce its main interest rate at its upcoming meeting. CME Group data suggests the bank will likely maintain its current rate.
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