Asian Indices Started The Year On A Mixed Note

Sensex is trading lower today, while Asian markets are trading mixed

Sonal Badhan,

Economist,

Bank of Baroda

Mumbai, January 2, 2024:  Global markets remained closed on New Year’s day, but Asian markets have seen a mixed opening today as China’s official manufacturing PMI data shows deepening contraction in Dec’23. However, Caixin China manufacturing PMI, which mainly covers small and medium firms in its survey, showed that activity held ground in Dec’23 (50.8 versus 50.7 in Nov’23). Although, respondents still believe that tighter consumer budgets and sluggish global demand remains a key worry. Separately in Australia, manufacturing PMI suggests that activity fell at the sharpest rate since May’20, as the index dropped to 47.6 in Dec’23 from 47.7 in Nov’23. Deteriorating demand conditions remains a key drag, which in turn has led to job losses and increased stocks. This week, markets will follow India’s 1st AE of FY24 GDP, PMIs of other major economies and also await FOMC minutes, non-farm payroll data for further guidance

•   Asian indices started the year on a mixed note with the official factory activity declining further and remaining in contraction in Dec’23 (49 from 49.4 in Nov’23). Sensex ended flat. Oil & gas and real estate stocks registered some gains. However, it is trading lower today, while Asian markets are trading mixed.
•   Global currencies closed mixed. Investors expect DXY to remain steady even as they awaits further cues on interest rate outlook from Fed and other economic data. Investors have priced in 86% chance of rate cut beginning from Mar’24. INR ended flat. However, it is trading weaker today, while other Asian currencies are trading mixed.
•   Apart from India, all other markets remained closed yesterday. India’s 10Y yield rose by 2bps owing to supply side pressures. Higher than expected borrowing announcement by states played on investor sentiments. However, it is trading flat at 7.20% today, awaiting global cues.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)