The lunar new year typically falls on the second new moon after the winter solstice and is celebrated in countries across East and Southeast Asia, including China, Korea, Japan, Vietnam, Singapore, and Taiwan. The year of the rabbit in the Chinese zodiac occurs every 12 years and the next one begins Sunday January 22, 2023. Lunar New Year is also known as the Chinese New Year or the Spring Festival when Asian communities around the world this year will say farewell to the Year of the Tiger and usher in the Year of the Rabbit.
People Born in the Year of The Rabbit
According to Chinese astrology, people born in the year of the rabbit are said to be intelligent, kind, and gentle. They are also said to be lucky in love and money, and to have a good sense of style.
During the year of the rabbit, it is traditional for people to wear red and other bright colors, as red is believed to bring good luck and ward off evil spirits. People also decorate their homes with red lanterns and other decorations, and give red envelopes filled with money as gifts to children.
Common lunar new year traditions include:
- Gathering with family and friends to celebrate with a reunion dinner.
- Giving red envelopes filled with money as gifts.
- Cleaning the house to sweep away bad luck.
- Decorating with red lanterns, banners, and spring couplets
- Setting off firecrackers to scare away evil spirits.
- Eating traditional foods such as dumplings, spring rolls, and sticky rice cakes
- Visiting the temple to pray for good luck.
- Engaging in activities such as dragon and lion dances, kite flying, and traditional games
It is also traditional to eat certain foods during the Lunar New Year, such as dumplings and fish, as they are believed to bring good luck and prosperity.
However, it should be noted that the effect of the Chinese Zodiac on the economy and the financial markets is mostly a superstition, and investors should base their decisions on facts and real-world data rather than on astrological predictions.
Lunar New Year Holidays
The Spring festival will officially begin and will go on till 1 February. The festivities end with the Lantern festival, preparations for which begins on February the 2nd. The Lantern Festival is then held on February the 5th.
China has a week-long public holiday for Lunar New Year. Non-essential markets, banks, offices, factories, and shops remain closed during this time. Schools are also shut for four weeks. Holidays in Asian countries like Hong Kong, Macao, Malaysia, Singapore, Vietnam, and Korea range from 1 to 3 days. It is celebrated as Tet in Vietnam and as Seollal in Korea.
Financial Market Closures
- China Markets closed all week.
- Taiwan Markets closed all week
- Hong Kong Markets closed Monday, Tuesday and Wednesday
- Indonesia Markets closed Monday
- South Korea Markets closed on Monday and Tuesday
- Malaysia Markets closed Monday and Tuesday
- Mongolia Markets closed Monday and Tuesday
- Singapore Markets closed Monday and Tuesday
- Vietnam Markets closed Monday, Tuesday and Wednesday
Lunar New Year and Financial Markets
The Bulls Have Placed Early Bests on the Year of the Rabbit
Heading into Lunar New Year Hong’s Kong’s Hang Seng index is up 11.44%, China’s CSI 300 8.00%, the South Korean KOSPI 7.10%, and Taiwan’s TAIEX 5.62%.
China’s CSI 300 Index rose 0.6% on Friday with a fourth straight week of gains and is up 19% from an Oct. 31 low, led by consumer stocks and financials. The move follows President Xi Jinping’s moves to exit Covid Zero and focus on growth.
The Lunar New Year can have an impact on financial markets, particularly in countries where the holiday is widely celebrated, such as China. The holiday can lead to a slowdown in economic activity as factories and businesses shut down, which can affect stock markets. Additionally, many investors may take time off during the holiday, leading to lower trading volumes and increased volatility in stock prices.
However, the impact on financial markets can also vary from year to year depending on the economic conditions and other factors. in 2022 the Chinese economy had one of its worst performances in decades as growth was dragged down by numerous Covid lockdowns followed by a deadly outbreak in December that swept across the country with remarkable speed.
China grew 3% in 2022, much lower than in 2021 and short of Beijing’s target of 5.5%. Other than 2020, it was the most disappointing showing since 1976, the year Mao Zedong died, when the economy declined 1.6%.
Additionally, the recent pandemic and the new normal of remote work may also affect the impact of Lunar New Year on financial markets. Passengers flock from China’s megacities to their hometowns for holidays.
Covid in 2023 is an ominous time for China.
“China is likely to see 36,000 Covid deaths a day during the Lunar New Year holidays, making it one of the most deadly periods of the pandemic, according to an updated analysis of the largest outbreak the world has yet experienced. The revised figures from the independent forecasting firm Airfinity Ltd. added 11,000 deaths a day to its Dec. 29 estimate… The update is based on data from China’s regional provinces combined with rates seen in other Covid Zero countries after they first lifted restrictions, the… firm said.”January 16 – Bloomberg (Jinshan Hong)
In summary, Lunar New Year can have an impact on financial markets, but it is not a reliable indicator for financial performance, and it should be considered along with other market factors before making any investment decisions.
From the Traders Community Research Desk