(Bloomberg) — Most Asian stocks fell after US equities declined on Friday, led by losses in technology shares.
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The MSCI Asia Pacific Index snapped a five-day gain as shares slipped in Australia and Japan while they edged up in Hong Kong. Treasury 10-year yields held near the highest since May after climbing last week, potentially weighing on shares. Trading is likely to remain slim — amplifying potential moves — due to the year-end holiday season.
“With the sour leads from US equity, we look to start the week on a soft tone to the Asian equity markets,” Chris Weston, head of research for Pepperstone Group, wrote in a client note. “Local markets are at the mercy of any remaining end-of-year portfolio flows, and the potential for more active managers to reduce risk, sensing limited remaining reasons to chase the tape from here.”
While Asian shares are most lower Monday, they are still heading for a successful year. The MSCI Asia Pacific gauge has advanced 7.9% in 2024 as central banks eased monetary policy and tech stocks rallied amid optimism over artificial intelligence. Monday is the last trading day for Japanese financial markets for the year, with public holidays from Tuesday through Jan. 6.
Shares of Jeju Air declined 16% in Seoul to the lowest on record, after one of the carrier’s aircraft crashed on Sunday, causing the death of all but two of the 181 occupants. The stock of its parent AK Holdings Inc. fell 12%.
US stock futures edged lower in Asia after the S&P 500 index slipped 1.1% Friday and the Nasdaq 100 dropped 1.4%. While every major industry group saw losses, tech megacaps bore the brunt of the selling. That’s after a surge that has seen the so-called “Magnificent Seven” account for more than half of the US equity benchmark’s gains in 2024.
“Santa has already come — have you seen the performance this year?” said Kenny Polcari, a strategist at SlateStone Wealth LLC. The coming week “is another holiday-shortened week, volumes will be light, moves will be exaggerated. Don’t make any major investing decisions,” he said.
Treasury 10-year yields were little changed Monday at 4.62%. The yield jumped 10 basis points last week as the Federal Reserve signaled the likelihood of fewer interest-rate cuts in 2025.
The Bloomberg Dollar Spot Index slipped 0.1% as the greenback edged lower against all its Group-of-10 peers. The gauge has still gained more than 7% in 2024, driven by the anticipation of “America First” policies from President-elect Donald Trump.
