Asian stock markets opened predominantly higher on Monday, buoyed by the favorable indicators from Wall Street last Friday. This uptick is largely driven by renewed optimism regarding future interest rate trends. However, traders remain cautious in anticipation of US President-elect Donald Trump's inauguration, amidst speculations concerning the possible repercussions of his administration's policies. Asian markets had ended Friday with mixed results.
Fueling this interest rate positivity, US Federal Reserve Governor Christopher Waller, in an interview with CNBC, expressed the possibility that the central bank might reduce interest rates multiple times this year, contingent upon inflation moderation as he anticipates. Waller noted that the rate cut frequency would be data-dependent, potentially ranging from three to four reductions if substantial inflation progress is made, or fewer if inflation proves persistent.
In Australia, the stock market has recovered some ground on Monday following Friday's losses, mirroring the positive sentiment from Wall Street. The S&P/ASX 200 index is slightly up, maintaining a strong position above 8,300 points, with most sectors seeing gains. Iron ore miners and technology stocks lead these gains, while gold miners falter.
The S&P/ASX 200 Index rose by 15.10 points, or 0.18 percent, to 8,325.50, after hitting a peak of 8,348.20 earlier. The All Ordinaries Index increased by 14.70 points, or 0.17 percent, to 8,572.10. Australian stocks had closed slightly down on Friday.
Major mining players like BHP Group edged up 0.5 percent, and Rio Tinto saw a rise close to 1 percent, whereas Fortescue Metals and Mineral Resources dipped by 0.1 to 0.2 percent. Oil companies performed well, with Woodside Energy and Origin Energy rising nearly 1 percent each and Santos climbing 0.3 percent. Beach Energy, however, fell close to 2 percent.
In the technology sector, Afterpay's parent company Block ascended nearly 1 percent, Zip inched up 0.2 percent, and Appen surged over 4 percent, while WiseTech Global and Xero dipped 0.2 percent each.
Gold miners were largely down. Evolution Mining decreased over 1 percent, Resolute Mining dropped nearly 4 percent, Northern Star Resources fell almost 3 percent, and Newmont slightly edged down 0.1 percent, while Gold Road Resources bucked the trend, climbing more than 1 percent.
The major banks experienced modest gains, with Westpac, National Australia Bank, ANZ Banking, and Commonwealth Bank each rising by 0.3 to 0.4 percent.
In other developments, Star Entertainment shares plummeted over 7 percent following the beleaguered casino operator's announcement that it might face solvency issues without new funding. Meanwhile, Iress shares jumped over 4 percent after announcing the sale of its superannuation business to Apex Group for $40 million in cash.
On the currency front, the Australian dollar traded at $0.621 on Monday.
Turning to Japan, the stock market saw a sharp uptick on Monday, recovering from previous losses, with the Nikkei 225 nearing the 38,900 mark. This rebound follows the favorable trends seen on Wall Street, with sizable gains driven by index heavyweights, and in the financial and technology sectors.
The Nikkei 225 Index closed its morning session at 38,948.47, up 497.01 points or 1.29 percent, after reaching a high of 39,032.93 earlier. Japanese stocks closed slightly lower on Friday.
Key players like SoftBank Group gained over 1 percent, and Fast Retailing saw an increase of almost 1 percent. Among the automakers, Honda rose nearly 1 percent, and Toyota climbed more than 2 percent.
Within the tech sector, Advantest and Tokyo Electron both increased by over 1 percent, while Screen Holdings surged almost 5 percent.
In banking, Mitsubishi UFJ Financial rose close to 2 percent, Mizuho Financial added more than 2 percent, and Sumitomo Mitsui Financial increased by over 1 percent.
Major exporters generally saw growth, with Panasonic and Mitsubishi Electric each gaining 1.5 percent, Sony rising over 1 percent, and Canon climbing nearly 1 percent.
In significant news, Daiichi Sankyo shares soared over 6 percent following US FDA approval of a breast cancer drug developed in collaboration with AstraZeneca.
Other major gainers included Taiheiyo Cement, which rose nearly 4 percent, Resonac Holdings, gaining more than 3 percent, and companies like Fanuc, Hitachi, Subaru, Konica Minolta, and Japan Steel Works, each adding almost 3 percent. Notably, there were no significant decliners in the market.In recent economic developments, Japan's core machinery orders climbed by a seasonally adjusted 3.4% in November, as announced by the Cabinet Office on Monday, reaching 899.6 billion yen. This rise defied predictions of a 0.7% decline following a 2.1% increase in October. Year-on-year, the orders surged 10.3%, surpassing expectations of a 5.6% growth, maintaining October's momentum. The total value of machinery orders from 280 manufacturers in Japan saw a monthly decrease of 14.4% but registered a 10.7% annual gain in November.
On the currency front, the U.S. dollar is currently trading in the upper 155 yen range as of Monday.
Across Asia, Hong Kong's market advanced by 2.3%, while markets in China, Malaysia, Taiwan, and Indonesia recorded gains between 0.2% and 0.8%. Conversely, New Zealand and Singapore experienced declines of 0.4% and 0.2%, respectively, with South Korea remaining relatively stable.
In the United States, Wall Street witnessed a robust upward trend during trading on Friday, with major indices effectively counteracting losses from the prior session. This positive shift pushed the Dow to its highest closing level in a month.
While the major indices retraced from their peak levels toward the session's end, they remained decisively positive. The Nasdaq leaped by 291.91 points, or 1.5%, to 19,630.20; the S&P 500 rose by 59.32 points, or 1.0%, to 5,996.66; and the Dow advanced by 334.70 points, or 0.8%, to 43,487.83.
European markets also demonstrated strong upward movements. The U.K.'s FTSE 100 Index increased by 1.4%, Germany's DAX Index climbed by 1.2%, and France's CAC 40 Index rose by 1.0%.
Crude oil prices continued their downward trajectory on Friday, extending the sharp decline from the previous session. West Texas Intermediate for February delivery dropped by $0.80, or 1%, closing at $77.88 per barrel on Friday, while still posting a weekly increase of about 1%.
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