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January 2025 started the year on a positive note, with global markets maintaining strong momentum amid easing inflation, stable economic growth, and steady central bank policies. Equities saw broad-based gains, led by technology and financial sectors, while commodities exhibited mixed performance. Bond yields remained stable, reflecting continued confidence in economic resilience.

Asian Markets

Asian markets extended their year-end rally, driven by China's ongoing recovery, robust corporate earnings, and strong domestic demand.

• China: The Shanghai Composite Index climbed 3.9%, supported by manufacturing growth, rising consumer spending, and continued government stimulus in real estate and infrastructure.
• Japan: Nikkei 225 gained 3.2%, as a weaker yen continued to support export-driven industries, particularly in automobiles and technology.
• India: The Sensex surged 4.1%, fueled by strong performances in IT, financials, and consumer sectors, with record inflows from foreign institutional investors.
• Southeast Asia: Markets in Indonesia and Malaysia posted steady gains, driven by export demand and stable monetary policies.

US Markets

US equities posted strong gains in January, buoyed by resilient earnings, stable Federal Reserve policies, and continued strength in the technology sector.

• S&P 500: Rose 4.2%, with technology, financials, and healthcare leading the gains.
• NASDAQ Composite: Advanced 5.1%, as AI and semiconductor stocks continued their strong rally amid rising demand and investment.
• Dow Jones Industrial Average: Increased 3.5%, with industrials, energy, and financials driving growth.

The Federal Reserve maintained its current interest rate stance, emphasizing gradual adjustments based on inflation and employment data.

European Markets

European stocks continued their upward trajectory, supported by strong economic data, easing inflation, and solid corporate earnings.

• Eurozone: The Stoxx Europe 600 climbed 3.7%, with financials, industrials, and consumer goods outperforming.
• Germany: The DAX gained 3.9%, driven by manufacturing recovery and optimism in export-driven sectors.
• UK: The FTSE 100 advanced 3.4%, led by energy, financials, and consumer discretionary stocks.

The European Central Bank (ECB) signalled a cautious but optimistic outlook, highlighting steady economic growth and improved inflation trends.

Commodities

Commodities saw mixed performance, with precious metals and agricultural products gaining, while energy prices remained volatile.

• Crude Oil: Brent crude declined 1.9%, closing near $105 per barrel, as global supply remained stable despite geopolitical tensions.
• Natural Gas: Prices fell 2.5%, reflecting mild winter conditions and stable inventories.
• Gold: Rose 3.0%, closing near $2,400 per ounce, benefiting from safe-haven demand and a weaker US dollar.
• Industrial Metals: Copper and aluminium continued their upward trend, fueled by infrastructure investments and China’s industrial recovery.
• Agricultural Commodities: Agricultural Commodities: Wheat and corn gained 2.8% and 3.2%, respectively, amid supply concerns due to adverse weather conditions.

Bonds

Bond markets remained relatively stable, as inflationary pressures continued to ease, leading to stable yields and tighter credit spreads.

• US Treasuries: The 10-year yield held at 4.80%, reflecting balanced growth and inflation expectations.
• Eurozone Bonds: German Bund yields remained at 3.10%, with investor confidence strengthening on stable economic indicators.
• Corporate Bonds: Credit spreads tightened further, as strong corporate earnings and investor sentiment fueled demand.

Summary

January 2025 saw a strong start to the year in global markets, with equities rallying on positive economic data and stable monetary policies. Asian markets benefitted from China’s continued recovery and robust regional demand, while US and European equities advanced on corporate earnings strength and improved investor sentiment. Commodities showed mixed performance, with metals and agriculture gaining, while energy remained volatile. Bond markets held steady, signaling confidence in economic stability as markets move into 2025.