World shares struggled for traction on Thursday after a jittery close to 2024, while the dollar weakened as investor sentiment dithered ahead of Donald Trump’s return to the White House.
The start of the New Year was shaping up to be a less favourable one for European and Asian equities, as uncertainty over the policies of incoming US President Trump and a more hawkish Federal Reserve outlook looked set to dominate market rhetoric for now.
Global shares, which had closed out 2024 with a strong annual gain of nearly 16 per cent, clocked a monthly loss of more than 2 per cent in December and ticked 0.1 per cent lower ahead of the Wall Street open.
European stocks eased during their first trading session of 2025 but the STOXX 600 index last recovered earlier declines and steadied by midday.
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US stock futures pointed higher, however, as S&P 500 and Nasdaq futures climbed roughly 1 per cent.
Other major bourses hovered either side of the unchanged mark with notable underperformance seen in France where the CAC 40 shed around 0.7 per cent.
European oil & gas stocks were buoyed by higher crude futures, as Russian gas firm Gazprom halted gas exports via pipelines running through Ukraine after Kyiv refused to renew a transit agreement.
Autos and luxury goods underperformed. An index tracking the region’s banks fell as much as 2.35 per cent.
China stocks ended sharply lower, logging their weakest New Year start since 2016, as factory data disappointed investors who were also waiting for more policy support.
China’s blue-chip CSI 300 Index closed down 2.9 per cent, while the Shanghai Composite Index tumbled 2.7 per cent and Hong Kong’s benchmark Hang Seng fell 2.2 per cent.
China’s benchmark stock gauge began the new year with losses after reports showed the nation’s manufacturing activity cooled in December. MSCI’s gauge of Asian shares headed for its lowest close in almost two weeks. Financial markets in Japan remain closed until next Monday.
“Onshore sentiment seems to be deteriorating” due to the poor PMI data and recent dollar gains, said Zhaopeng Xing, senior China strategist at ANZ Bank China. “Investors would like to pull back against possible US tariffs.” - Reuters, Bloomberg
