San Francisco Frontiers - Wall Street stocks bounce higher, Europe retreats

Asia's main equity indices closed mostly higher, Seoul jumping nearly two percent 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.

"The futures for the major indices are indicating a modestly higher open, but based on yesterday's trade, we're not sure that is bringing much comfort to market participants," said Briefing.com analyst Patrick O'Hare.

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".

Nippon Steel has described the transaction as a lifeline to Pennsylvania's much-diminished steel industry.

US Steel's share price slumped nearly seven percent at the start of 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.

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.

- Key figures around 1430 GMT -

New York - Dow: UP 0.5 percent at 42,608.59 points

New York - S&P 500: UP 0.5 percent at 5,899.78

New York - Nasdaq Composite: UP 0.7 percent at 19,408.20

London - FTSE 100: DOWN less than 0.1 percent at 8,257.21

Paris - CAC 40: DOWN 1.0 percent at 7,317.29

Frankfurt - DAX: DOWN 0.4 percent at 19,937.11

Tokyo - Nikkei 225: closed

Hong Kong - Hang Seng Index: UP 0.7 percent at 19,760.27 (close)

Shanghai - Composite: DOWN 1.6 percent at 3,211.43 (close)

Euro/dollar: UP at $1.0293 from $1.0269 on Thursday

Pound/dollar: UP at $1.2400 from $1.2382

Dollar/yen: DOWN at 157.27 yen from 157.52 yen

Euro/pound: UP at 83.00 pence

West Texas Intermediate: UP 0.5 percent at $73.49 per barrel

Brent North Sea Crude: UP 0.3 percent at $76.14 per barrel

burs-rl/jj

R.Baker--SFF