Asian markets mixed after S&P 500 ended worst year since 2008

BANGKOK – Stocks started the year mixed on Monday with most markets closed for the New Year holiday.

This week brings payrolls data and minutes from the Federal Reserve’s latest meeting as it fights inflation. This is likely to remain the overriding concern for investors as 2023 begins with lingering uncertainties over the war in Ukraine and whether rate hikes to tame inflation could lead to a recession.

South Korea’s Kospi fell 0.1% to 2,233.96 and Mumbai’s Sensex rose less than 0.1% to 60,871.24. Jakarta’s benchmark was lower.

The future for the German DAX fell by 0.5%.

US stock markets will remain closed on Monday for the Lunar New Year holiday.

There was a report over the weekend Chinese manufacturing shrank for a third straight month in December, the biggest drop since February 2020 as the country grapples with a nationwide COVID-19 surge after suddenly easing measures to control the epidemic.

A monthly purchasing managers’ index fell to 47.0 from 48.0 in November, according to data released by the National Bureau of Statistics on Saturday. Numbers below 50 indicate a contraction in activity.

China is in the process of lifting strict COVID-19 guidelines that have hampered the production of raw materials and commodities and discouraged travel. It is uncertain what impact the reopening will have on the global economy.

Fed meeting minutes may give investors more insight into their next moves. The government will also publish its November job vacancies report on Wednesday. This will be followed by a weekly unemployment update on Thursday. The closely watched monthly jobs report is due Friday.

Wall Street is also awaiting corporate earnings reports, which will begin arriving around mid-January. Companies have warned investors that inflation is likely to eat away at their profits and earnings in 2023, even after raising the prices of everything from groceries to clothing to offset inflation and bolster their profit margins.

On Friday, US markets continued to fall in quiet trading, closing out the worst year for the benchmark S&P 500 since 2008.

The S&P 500 fell 0.3% to 3,839.50. It posted a 5.9% loss for the month of December and down 19.4% in 2022, or 18.1% including dividends.

That’s only the third annual decline since the financial crisis 14 years ago and a painful turnaround for investors after the S&P 500 posted a nearly 27% gain in 2021. Overall, the index lost $8.2 trillion, according to the S&P Dow Jones Indices.

The Dow fell 0.2% on Friday to close at 33,147.25, down 8.8% for the year. The Nasdaq slipped 0.1% to 10,466.48, down 33.1% for the year. The Russell 2000 lost 0.3% to end at 1,761.25.

stocks fought all year as pandemic stimulus was withdrawn and inflation put increasing pressure on consumers, raising fears that economies could slip into recession. Central banks raised interest rates to combat high prices.

The Fed’s interest rate began 2022 in a range of 0% to 0.25% and ended the year after seven hikes in a range of 4.25% to 4.5%. The US Federal Reserve forecasts it will reach a range of 5% to 5.25% by the end of 2023. Their forecast calls for no rate cut before 2024.

Rising interest rates prompted investors to sell off the high-priced stocks of tech giants like Apple and Microsoft and other companies that were thriving as the economy recovered from the pandemic.

Amazon and Netflix lost around 50% of their market value. Tesla and Meta Platforms, Facebook’s parent company, each fell more than 60%, their largest annual declines ever.

Russia’s invasion of Ukraine added to inflationary pressures earlier in the year as oil, gas and food commodity prices became even more volatile amid ongoing supply chain issues. Oil closed at $80 on Friday, about $5 higher than at the start of the year. In between, however, oil surged above $120, helping energy stocks post the only gain among the 11 sectors in the S&P 500, up 59%.

In forex trading, the US dollar rose to 130.93 Japanese yen from 130.89 yen. The euro fell from $1.0699 to $1.0697.


AP business writers Alex Veiga and Damian J. Troise contributed.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission. Asian markets mixed after S&P 500 ended worst year since 2008

Sarah Y. Kim

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