The Asian markets opened the week on a turbulent note, driven by significant drops in South Korean tech stocks and declining trends in precious metals and oil prices. Investors are processing mixed signals from China’s manufacturing sector and broader geopolitical uncertainties.
South Korea Leads Market Losses
On Monday, South Korea’s Kospi index recorded over a 4% decline, with the Kospi 200 futures plummeting by 5%, triggering automatic trading halts. Tech giants SK Hynix and Samsung Electronics experienced drops of 6.66% and 5.55%, respectively. The smaller Kosdaq index also fell by 4.45%, intensifying the bearish sentiment region-wide.
Other major Asian indices followed suit as Japan’s Nikkei 225 fell 1.03%, Hong Kong’s Hang Seng Index decreased by 3.03%, and mainland China’s CSI 300 dropped 1.7%.
Currency and Commodities Take a Hit
Amid the market turmoil, currency markets were not immune. The South Korean won weakened notably, aligning with declines in futures tied to U.S. indices. Bitcoin, a popular cryptocurrency, also saw a steep drop, trading below $80,000 for the first time since April, now hovering near $76,700.
Precious metals were among the steepest losers. Gold prices dipped 6.4%, trading at $4,556 an ounce, while silver plunged by 9.5% to $76.43 an ounce. Friday’s session saw silver suffer its most significant one-day drop since 1980 at nearly 30%. Investors remain cautious as these volatile trends suggest short-term liquidity pressure in the commodity markets.
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Mixed Signals From China’s Manufacturing Sector
China’s manufacturing recovery showed contrasting data. According to the private RatingDog China General Manufacturing PMI, January’s factory activity rose to a seasonally adjusted 50.3, indicating growth in new domestic and export orders. Yet, subdued business confidence dampens the recovery’s outlook as cost pressures and geopolitical risks loom.
Contrarily, the official PMI data reported a contraction, falling to 49.3 in January, indicating weaker sentiment amongst manufacturers. The dichotomy between these reports highlights uncertainty in China’s near-term economic trajectory.
Oil Prices Under Pressure
Another major market mover has been oil prices. Brent crude and West Texas Intermediate (WTI) dropped by more than 5% each as fears of a supply crunch diminished following U.S. President Donald Trump’s comments hinting at possible U.S-Iran negotiations. Policymakers remain cautious about escalating regional tensions, which could destabilize oil prices further.
Corporate Developments: Disney Shake-Up
In corporate news, all eyes are on Walt Disney’s potential leadership transition. According to reports, Josh D’Amaro, the current chairman of Disney’s theme park division, is being considered to succeed Bob Iger as CEO. As Disney prepares to release its fiscal first-quarter earnings, the decision has significant implications for the entertainment giant’s future.
Stay tuned as Asian and global markets anticipate further developments, balancing expectations of economic resilience against mounting geopolitical and financial risks.
