Volkswacht Bodensee - Stock markets begin new year with losses

The dollar was up against the euro and pound but down versus the yen. Oil prices jumped on hopes of rebounding demand.

“January can be a testing time for markets and that's already proved the case as investors fret about the impact of Donald Trump's trade policies," noted Russ Mould, investment director at AJ Bell.

"Technology and industrial stocks were among the areas worst hit, dragged down by weak Chinese manufacturing data and the fact Trump will be back in power in just over a fortnight.

"Tariffs are expected to be at the top of the new president’s agenda and China is expected to be the biggest loser," Mould added.

The Hong Kong and Shanghai stock markets slumped more than two percent by their close Thursday.

Nearing the half-way stage in Europe, Paris along with Madrid and Milan had shed around 1 percent.

The euro fell to its lowest level against the dollar since November 2022.

While the US Federal Reserve is seen cutting interest rates less than forecast this year, the European Central Bank is expected to keep reducing amid weakness for Europe's biggest economy Germany.

"Optimism about the strength of the mighty US economy remains buoyant for 2025," Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Thursday.

"Already growth has kept outpacing forecasts as consumers and companies have shrugged off the impact of high interest rates."

Following a largely successful 2024 for equity markets as inflation reduced further and investors scooped up technology stocks, sentiment soured towards the end of the year.

Still, Wall Street's Dow index ended the year up around 13 percent, while the S&P 500 and the Nasdaq -- which have more tech stocks -- climbed more than 23 percent and around 29 percent respectively on the artificial intelligence boom.

Frankfurt's DAX added almost 20 percent, as did Japan's Nikkei. The FTSE 100 gained nearly six percent, while France's CAC 40 was the outlier with a drop of 2.2 percent.

- Key figures around 1115 GMT -

London - FTSE 100: FLAT at 8,172.25 points

Paris - CAC 40: DOWN 1.2 percent at 7,294.11

Frankfurt - DAX: DOWN 0.3 percent at 19,854.45

Tokyo - Nikkei 225: closed

Hong Kong - Hang Seng Index: DOWN 2.2 percent at 19,623.32 (close)

Shanghai - Composite: DOWN 2.7 percent at 3,262.56 (close)

Euro/dollar: DOWN at $1.0324 from $1.0360 on Tuesday

Pound/dollar: DOWN at $1.2451 from $1.2520

Dollar/yen: DOWN at 157.09 yen from 157.32 yen

Euro/pound: UP at 82.93 at 82.74 pence

Brent North Sea Crude: UP 1.4 percent at $75.66 per barrel

West Texas Intermediate: UP 1.4 percent at $72.73 per barrel

burs-bcp/ajb/gv

O.Schlaepfer--VB