Asian stocks were down yesterday in thin end-of-year trading, following a subdued lead from the US where investors took profits.
Wall Street on Monday had its worst day in nearly a month, falling from record highs after the extended rally of recent days.
Hong Kong stock market ended a half-day of trading almost 0.5% down, although the bourse rallied more than 7% in December.
Shanghai was marginally up, Taipei was off, and Sydney shed almost 2%. Jakarta, Tokyo, Manila, Seoul and Bangkok were all closed for a public holiday.
“While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020’s uncertainty,” Stephen Innes, chief Asia market strategist at AxiTrader, said in a note.
Asian investors were also watching for key policy announcements early in the New Year.
North Korean leader Kim Jong-un is set to give his New Year’s speech on Wednesday, with all eyes on nuclear-armed Pyongyang’s threat of a “new way” after its end-of-year deadline for sanctions relief from the US, analysts said. China’s Xi Jinping is also scheduled to give a New Year’s address.
In China, the closely watched Purchasing Managers’ Index, a gauge of activity in the country’s factories, was at 50.2 in December, according to official data.
The reading — slightly above the 50-point mark that separates growth and contraction — beat a forecast of 50.1 by analysts surveyed by Bloomberg, and comes amid a thaw in the US-China trade spat.
The better-than-expected macroeconomic data had an “indirect positive impact” on the Chinese bourse, said Zhang Qi, an analyst with Haitong Securities.
Reports on Monday also said the US and China would shortly sign a partial trade deal, with White House economic aide Peter Navarro telling Fox News the signing could occur “within a week or two”.
“The P1 (phase one) deal is still ‘skinny’ relative to a full trade de-escalation scenario,” cautioned AxiTrader’s Innes.
“Investors will then press to consider the P2 risks, after all — how much more progress can be realistically expected ahead of the US elections next year?”
Oil markets were largely unchanged, despite reports Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz — a chokepoint for a third of the world’s seaborne oil.
Traders were also waiting for the release of US crude production data.
In early European trade, London shed 0.3% and Paris lost 0.2%, while Frankfurt was closed for a holiday.
In Hong Kong, the Hang Seng closed down 0.5% to 28,189.75 points and Shanghai — Composite closed up 0.3% to 3,050.12 points yesterday.
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