Markets get off to a jittery start

Agencies and Cici Cao

Global markets started 2025 with a wobble amid uncertainty over the policies of incoming US President Donald Trump and a more hawkish Federal Reserve outlook.

Chinese and Hong Kong stocks both declined amid slower-than-expected factory activity growth. European markets also recorded a drop.

The US futures index climbed.

China's CSI 300 Index closed down 2.9 percent - the steepest drop since 2016, while the Hang Seng Index once lost nearly 500 points before closing 2.18 percent lower at 19,623 points, with a turnover of HK$164.8 billion. This came after China's factory activity grew in December but at a slower-than-expected pace, as overall sales were dampened by falling export orders amid concerns over the trade outlook.

The Caixin/S&P Global manufacturing PMI nudged down to 50.5 in December from 51.5 the previous month, undershooting analysts' forecasts in a Reuters poll of 51.7.

In France, stocks dropped over 1 percent and UK stocks were down 0.06 percent, while Dow Jones futures were up 203 points at 43,076.

Meanwhile, China's regulators raised the leverage for refinancing of as much as 10 times of the repurchased shares, a move to stimulate the stock market.

The regulators reduced the minimum self-financing ratio for stock buyback loans to 10 percent, allowing financial institutions to finance up to 90 percent of the buyback amount -- enabling leverage of up to 10 times.

In Hong Kong, Xinyi Glass (0868) and Xinyi Solar (0968) both issued profit warnings, with their annual net profits for the year ending December declining by up to 40 percent and 80 percent, respectively. Their stocks closed down 5.07 and 6.05 percent.

Kin Pang (1722) plunged 85.15 percent to HK$0.072, after skyrocketing 72 times from HK$0.059 to HK$0.485 on its last trading day on December 31.

In other news, Citibank (Hong Kong) maintains a mid-year target of 26,000 for the HSI in 2025, with a year-end target of 28,000. It predicts Beijing will unveil a consumption boost plan of 3 trillion yuan (HK$3.17 trillion).

Goldman Sachs expects 2.4 percent growth in US gross domestic product and three rate cuts by the Federal Reserve in 2025.