*** Wall Street stocks bounce higher, Europe retreats | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

Wall Street stocks bounce higher, Europe retreats

AFP | London

Email : editor@newsofbahrain.com

Wall Street stocks bounced higher at the start of trading on Friday, but European stock markets retreated as traders booked profits from a positive start to 2025.

Asia’s main equity indices closed mostly higher, Seoul jumping nearly 2% despite deepening political uncertainty in Asia’s fourth-largest economy.

There were also gains for Hong Kong, Sydney and Taipei, although Shanghai slumped for a second session running.

Wall Street ended lower Thursday on the first US trading day of 2025 despite having started the day higher.

“People who wanted to take profits last year decided to wait until January to take profits so that they delay paying taxes on it by one year,” LBBW’s Karl Haeling told AFP.

“The big question now is: is there too much bullishness in the market?” he added, referring to optimism that Trump’s election victory would be good for the stock markets given his promises of tax cuts and deregulation.

Instead of enjoying a so-called Santa Claus rally of rising prices during the year-end holiday period, Wall Street limped into 2025 as investors banked their healthy 2024 gains and worried about what the future holds.

“The post-Christmas malaise in US stocks continued as investors await the inauguration of president-elect Donald Trump who could prove a wildcard for markets this year,” noted Russ Mould, investment director at AJ Bell, said of Thursday trading.

Departing President Joe Biden blocked early Friday the proposed $14.9-billion purchase of US Steel by Japan’s Nippon Steel, saying it would “create risk for our national security and our critical supply chains”.

The companies disputed the deal presented national security risks and called Biden’s rejection a political decision that failed to properly review the transaction.

Nippon Steel has previously described the transaction as a lifeline to Pennsylvania’s much-diminished steel industry. US Steel’s share price slumped 6.7% in late morning trading. Nippon Steel shares had closed higher in Asian trading ahead of Biden’s announcement.

The dollar dipped Friday against the euro, pound and yen.

The US currency had Thursday reached multi-year highs against some of its main rivals, reflecting expectations that the world’s biggest economy would outpace others in 2025.

The yuan on Friday hit the lowest dollar level since late 2023.

“The very negative performance of China equities provides a better indication of the weakening sentiment around China assets at the start of 2025, and ahead of Trump’s return to the White House,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

Investors are gearing up for Trump’s inauguration on January 20, set to be followed by the formal announcement of deep tariffs, especially on Chinese goods, that could rattle international trade.

A monthslong US manufacturing slump lessened last month, according to better-than-expected survey data published Friday, as demand showed signs of improving.

The Institute for Supply Management’s (ISM) manufacturing index was 49.3% last month, up 0.9 percentage points from November, it said in a statement.

US jobless claims released Thursday fell more than expected, highlighting a robust labour market and leaving the Federal Reserve with less reason to support fresh rate cuts.

Other significant economic releases ahead include data on inflation and retail sales during the holiday shopping season.

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