Futures on Stocks Indicate Gains Following Year-End Selloff – Asia Market Wrap

US and European market futures increased, indicating a possible rebound following a year-end shakeout as traders returned from their New Year’s Day vacations.

China’s economy is likely to grow by roughly 5% in 2024, President Xi Jinping stated at a new-year event on Tuesday. The nation’s sovereign bond yields fell to a new record low as the central bank announced increased liquidity support for the economy. Stocks in the country’s banks fell when dividends were taken into account.

Shares fell in Asia, with Chinese shares leading the way on the first trading day of the year. Sentiment became pessimistic as Chinese economic data indicated a weakening economy and markets anticipated potentially greater taxes. MSCI’s Asian market index is set to close at its lowest level in over two weeks. Financial markets in Japan remained closed.

The Asian risk-off mentality reflects the region’s prudence as geopolitical tensions simmer and traders begin to implement an asset allocation strategy for 2025. Investors are focused on China’s development prospects, the Fed’s policy course, and the agenda of US President-elect Donald Trump.

Oil climbed higher after industry data showed that US oil stockpiles continued to drop. The American Petroleum Institute said that inventories declined by 1.4 million barrels last week, marking the sixth consecutive drop. Gold rose.