Asia-Pacific stocks performed well in 2024, with most major markets ending the year higher as the region’s central banks eased monetary policy and a boom in artificial intelligence boosted technology stocks.

Taiwanese tex As of December 23, the Hong Kong stock market rose 28.85%, leading the region’s stock markets. Hang Seng Index Ranked second with 16.63%.

Asian success Inflation falls faster than elsewhere in the worldMike Shiao, chief investment officer of investment management firm Invesco Asia ex-Japan, said this paves the way for monetary easing.

“As the Fed has now begun its easing cycle, Asian countries will have more room to cut interest rates in 2025,” he said in a report. Loose monetary policy tends to boost stock markets.

Market focus on technology and tech-related stocks helped lift the Taiwan Exchange. heavyweight TSMC Soaring 82.12% in 2024, Apple’s major supplier Foxconn – trading at Hon Hai Precision Industry An improvement of 77.51%.

Although Demand for AI data centers and servers may slow Demand for AI-powered phones, PCs and other consumer electronics is likely to increase in 2025 after strong growth this year, an outlook report from DBS Bank said.

DBS Bank pointed out that the global semiconductor industry usually experiences an expansion cycle that lasts about 30 months. The current cycle begins in September 2023 and is likely to extend until the end of 2025.

While tech stocks helped boost Taiwan, they couldn’t save South Korea, the only major Asian market to end the year in negative territory. The country’s “Enterprise Value Enhancement Plan” appears to have failed to boost stocks amid tariff concerns and Political turmoil increases uncertainty.

national benchmark Cospi As of December 23, the stock fell 8.03%, becoming the worst performing market in Asia.

Paul Kim, head of equities at Eastspring Investments, said in the company’s 2025 outlook that major economies, especially the United States and China, will greatly affect South Korea’s export-driven economy.

“Major exporters such as information technology hardware and automobile manufacturers may face challenges,” he added.

The impeachment of President Yoon Suk Yeol will undoubtedly put pressure on investors, with Lorraine Tan, director of Asia equity research at Morningstar, telling CNBC earlier this year that “a leadership change is needed.” The longer it takes, the more likely investors are to be marginalized.”

Kim also said the government would play a key role in the country’s market, stressing that potential reforms to corporate regulations, fiscal stimulus measures and the possibility of further interest rate cuts by the Bank of Korea could help improve the business environment and stimulate domestic demand.

Fed at last meeting of 2024 Suggests interest rate cuts will be smaller In 2025, the inflation forecast was also raised.

Nomura Securities sees “divergent monetary policy outlooks” in the region and said countries with greater foreign exchange risks such as China, Australia, South Korea and Indonesia will loosen monetary policy in 2025.

Loose monetary policy typically weakens a country’s currency, making exports cheaper and potentially supporting economic growth in the face of tariffs.

On the other hand, interest rates will rise in countries with “strong growth, higher inflation and still loose monetary conditions,” such as Japan and Malaysia.

Overall, there’s a lot of uncertainty surrounding 2025, experts say.

Nomura analysts wrote that the region “will see turmoil ahead,” noting that while strong AI demand and export front-loading should provide some growth support in the first quarter, the region “appears to be turbulent” from the second quarter onwards. It’s heading for rougher seas” because of the impact of the Trump presidency, overcapacity in China and a slowdown in the semiconductor cycle.

However, the firm sees growth performance in Asian economies with strong domestic demand buffers such as Malaysia and the Philippines outperforming India, Thailand and South Korea, which may face headwinds.