Asian stocks declined on Monday (December 30) in cautious holiday trading, as markets braced for a potentially turbulent 2025. With trading volumes light, U.S. and European equity futures also pointed lower following Friday’s losses.
The Stoxx 600 index dropped 0.4%, with trading volumes remaining light due to the holiday season. Tech stocks led the downturn, as the “Magnificent Seven” giants, which had driven this year’s rally, experienced a pullback. Elon Musk’s Tesla fell by about five percent, and AI chipmaker Nvidia dropped around two percent. In Asia, a regional stock gauge ended a five-day streak of gains.
“We can’t drive major conclusions in a holiday-shortened and thin-trading-volume week, but last week’s price action looked pretty close to the narrative of rotation from tech to non-tech stocks that many investors expect to be the theme of next year,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said, according to Bloomberg.
Market sentiment was weighed down by fears that U.S. interest rate cuts may be slower than anticipated and the possibility of higher import tariffs after Trump’s inauguration on January 20.
“With US (bond) yields climbing and liquidity essentially non-existent, there’s always the potential for outsized moves,” Stephen Innes at SPI Asset Management reportedly said. “This comes during a critical phase of year-end rebalancing, intensified by hefty equity positions across portfolios.”
Markets Slip Amid Crisis, Holidays
Monday’s trading volumes for Japanese stocks were approximately 17% lower than their 30-day average, according to Bloomberg data. This marks the last trading day of the year for Japanese financial markets, with public holidays beginning Tuesday and lasting until January 6.
Jeju Air’s stock dropped 16% in Seoul to a record low after one of its aircraft crashed on Sunday, resulting in the deaths of all but two of the 181 people on board. The stock of its parent company, AK Holdings Inc., also fell by 12%.
Seoul, Hong Kong, Taipei, Sydney, and Manila all ended the day in the red, while Shanghai, Singapore, and Kuala Lumpur were among the few markets to post gains.
