Asian Shares Decline Amid Investor Caution and Tokyo's New Year Closure

TOKYO (AP) — Most Asian shares saw declines on Thursday, as Tokyo's main stock market remained closed for the New Year celebrations.

Investor sentiment was cautious, influenced by uncertainties surrounding potential policy changes from President Donald Trump. Additional political instability in South Korea contributed to a prevailing wait-and-see attitude among traders.

In early trading, Australia’s S&P/ASX 200 experienced a slight increase, rising 0.4% to 8,193.90. Meanwhile, South Korea's Kospi index fell nearly 0.1% to 2,397.54. In Hong Kong, the Hang Seng Index dropped 1.3% to 19,807.19, while the Shanghai Composite Index declined 0.8% to 3,325.56.

On Wall Street, trading was halted on Wednesday due to the New Year’s Day holiday.

Investors anticipate an update on U.S. construction spending for November, with manufacturing data set to be released on Friday.

Notably, on January 9, the New York Stock Exchange and Nasdaq will close their equity and options markets in honor of former President Jimmy Carter, who passed away recently at the age of 100.

U.S. stock indexes concluded the last trading session mostly lower. The S&P 500, after initially gaining, ended down by 0.4% at 5,881.63. Despite this, the index achieved a remarkable 23.3% increase over the past year, marking its second consecutive year of over 20% gains.

The Dow Jones Industrial Average also retreated, slipping 0.1% to close at 42,544.22. The Nasdaq composite faced a more significant decline, falling 0.9% to finish at 19,310.79.

This past year's rally was primarily driven by large technology companies, propelling the Nasdaq to a notable 28.6% gain. The more traditional Dow, being less tech-heavy, still achieved a respectable 12.9% increase.

Overall, the S&P 500 lost 25.31 points, while the Dow decreased by 29.51 points, with the Nasdaq dropping 175.99 points.

The recent surge in U.S. markets has been attributed to a robust economy, strong consumer spending, and favorable job conditions. Noteworthy increases in stock prices of companies involved in artificial intelligence, like Nvidia, further buoyed market performance.

Following three interest rate reductions in 2024, the Federal Reserve has taken a more cautious stance moving into 2025. Persistent inflation concerns arise as the nation prepares for President-elect Trump to take office. His proposals to raise tariffs on imports are igniting fears of re-emerging inflation, as companies may react by increasing prices.

In energy markets, benchmark U.S. crude saw an uptick of 36 cents, reaching $72.08 per barrel, while Brent crude rose 34 cents to $74.98.

In the currency exchange, the U.S. dollar slightly fell to 157.28 Japanese yen from 157.24 yen. The euro, on the other hand, increased to $1.0373 from $1.0361.

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