China’s Services Sector Sees Strongest Growth in Seven Months
Asia-Pacific markets showed a mixed performance on Monday as investors digested the latest economic data from key regional economies. China’s Caixin services purchasing managers’ index (PMI), compiled by S&P Global, rose to 52.2 in December, up from 51.5 in November. This marks the fastest expansion in the country’s service sector since May 2024, driven by increased new business inflows. However, export business declined for the first time since August 2023, and employment levels in the sector saw a dip due to waning business optimism.
In an effort to bolster economic growth, China’s central bank announced over the weekend that it would implement a “moderately loose” monetary policy in 2025. Despite the optimistic PMI figures, China’s mainland CSI 300 index dipped 0.19%, while Hong Kong’s Hang Seng index fell 0.2% after initially opening higher.
Regional Markets Reflect Diverging Trends
The Asia-Pacific market painted a varied picture. Japan’s benchmark Nikkei 225 led regional losses, dropping 1.12%, while the broader Topix fell 0.82%. In contrast, South Korea’s Kospi surged 1.47%, and the smaller Kosdaq index gained 1.08%, reflecting investor confidence despite ongoing political turbulence.
Political uncertainty continues to loom over South Korea as tensions escalated following an attempt to arrest impeached President Yoon Suk Yeol on charges of insurrection. Over the weekend, the head of the presidential security service stated an inability to comply with efforts to detain Yoon, adding to the country’s political complexities.
Meanwhile, Australia’s S&P/ASX 200 hovered just above the flatline, showing limited reaction to the region’s mixed economic indicators. Investors appeared cautious as they assessed the broader implications of regional instability and China’s economic policies.
Global Markets Rebound as U.S. Tech Stocks Lead Gains
In the United States, markets rebounded after a five-day losing streak, providing some optimism for global investors. The Nasdaq Composite and S&P 500 surged on Friday, driven by a rally in tech stocks. The S&P 500 closed 1.26% higher, while the Nasdaq Composite gained 1.77% to settle at 19,621.68. The Dow Jones Industrial Average also rose, advancing 0.8%.
The mixed performance across the Asia-Pacific market underscores the varying economic and political dynamics at play. While China’s robust services sector growth offers a beacon of hope, challenges such as declining export business, political uncertainty in South Korea, and subdued activity in other key economies highlight the complexities facing the region as it enters 2025.
