South Korea turmoil, PBOC rate cuts

Asia-Pacific markets opened higher on Friday, breaking ranks with Wall Street peers that ended lower on the first trading session of 2025, weighed down by technology stocks.

Hong Kong Hang Seng Index rose 0.35%, while mainland China’s benchmark CSI 300 gained 0.13%, recovering from Thursday’s big falls.

The People’s Bank of China is planning to cut interest rates “at an appropriate time” this year, the Financial Times reported citing comments from the central bank. The country’s 7-day reverse repo rate is currently set at 1.5%.

Separately, China’s Commerce Ministry plans to impose export restrictions on certain technologies used to make battery components and to process critical minerals such as lithium and gallium, according to a notice posted Thursday.

Investors in Asia continue to assess political uncertainty in South Korea as the country’s corruption watchdog seeks to execute an arrest warrant for impeached President Yoon Suk Yeol, according to local media Yonhap News. Yoon’s short-lived martial law attempt on December 3 led to political turmoil in the country.

The three main US indexes ended the first trading session of the New Year lower, extending the weakness to the end of 2024, signaling that the markets may not see a “Santa Claus rally” this year .

Investors hoped to a “Santa’s Rallies” covering the last five trading days of a year and the first two trading days of the following January. During this period of time, the S&P 500 gained an average of 1.3% while almost 80% of the time ended higher, Dow Jones Market Data going back to 1950 showed.

During the night in the United States, the blue-chip Dow Jones Industrial Average lost 151.95 points, or 0.36%, to end at 42,392.27, while the S&P 500 down 0.22% to 5,868.55 and tech-heavy Nasdaq Composite falling 0.16% to 19,280.79.

That marked the fifth straight session in the red for the S&P 500 and the Nasdaq, their longest losing streak since April. The big tech stocks weighed on the market, with Apple falling 2.6%, and Tesla slumping 6% on lower annual shipments.

— CNBC’s Jesse Pound and Christina Cheddar Berk contributed to this report.