Eastspring "Asia and Emerging Markets, New Investment Opportunities Amid Market Volatility"

Domestic Stock Market Gains Momentum with Advanced Technology Industry Emerging as New Growth Driver
China Supported by Attractive Valuations and Additional Fiscal and Monetary Stimulus

Next year, the global economy is expected to be influenced primarily by policy changes from the U.S. Trump administration and adjustments in interest rate cuts by the Federal Reserve (Fed), with new investment opportunities emerging mainly in Asian markets.

Eastspring Asset Management Korea announced on the 10th its ‘2025 Market Outlook’ report, which contains the global Eastspring Investment team’s market forecast for the coming year.

The report defined next year as “a year of high global uncertainty.” It predicted that global growth may slow in the first half of the year but will be significantly affected by the economic conditions in the U.S. and China in the second half. Despite market volatility, it forecasted good investment opportunities in Asia and emerging markets.

The Chinese stock market is expected to be supported by attractive valuations and additional fiscal and monetary stimulus measures next year. Considering the upward trend since the policy announcement in September this year, the report recommended selective investment in stocks with visible earnings growth momentum rather than chasing the market. The consumer sector is expected to be a major beneficiary due to product and service upgrades, policy support, and strengthened cost management.

The Indian stock market is anticipated to require active management amid concerns over slowing economic growth momentum, rising market valuations, and earnings uncertainties in the last quarter of this year. According to the Indian securities industry, more than 50% of the top 75 Indian companies as of the end of October are held by domestic investors, which is seen as a stabilizing factor alleviating major concerns about foreign investor outflows. Despite cyclical challenges, the Indian economy is viewed as a market offering structural investment opportunities, with expected growth in the financial, telecommunications, and healthcare sectors.

The Japanese stock market is projected to see further gains, especially among small and mid-cap stocks. Domestic economic drivers such as wage increases and rising consumer spending are expected to positively impact these small and mid-cap stocks. The report also noted that cyclical sectors like machinery and materials are attracting attention due to their attractive valuations.

The Korean stock market is likely to secure upward momentum as advanced technology industries such as semiconductors, electric vehicle (EV) batteries, and artificial intelligence (AI) emerge as new growth drivers. Advances in semiconductor technology and increased demand for EV batteries are expected to strengthen the global competitiveness of Korean companies, and the relatively low valuations suggest the Korean stock market could show a recovery trend. The report forecasted that advanced technology industries like AI, EV, and semiconductors will lead the Korean economy over the next decade, emphasizing the need for strategic responses balancing exports and domestic markets.

Park Cheon-woong, CEO of Eastspring Asset Management, stated, “Next year marks an important period as the global economy enters a structural transition phase. It is crucial to identify regions and industries with long-term growth potential without being swayed by short-term market fluctuations.” He added, “Eastspring Asset Management will continue to closely analyze market changes amid a rapidly changing environment to provide new opportunities for Korean investors and establish itself as a trusted partner.”