Asian stock markets displayed mixed performances on Thursday, even as a favorable inflation report reinforced expectations that the Federal Reserve will continue to reduce interest rates. Investors are anticipating the results from a pivotal policy meeting in China, where leaders are expected to outline the economic priorities for the coming year.
During Asian trading, the dollar remained stable, and gold incrementally increased for the fifth consecutive session, approaching a peak not seen in over two weeks. Oil prices extended their overnight rally amid the potential for stricter sanctions on Russian crude.
China's Shanghai Composite Index rose by 0.85% to close at 3,461.50. This uptick followed reports suggesting that Chinese leaders and policymakers might allow the yuan to weaken next year as a strategy against the threat of a trade war with the United States. The yuan managed to stay above a one-week low after the central bank kept its official midpoint for the currency stable. Hong Kong's Hang Seng Index increased by 1.20% to close at 20,397.05.
In Japan, markets witnessed a sharp increase, primarily driven by technology stocks, after strong performances in the tech sector propelled Amazon.com Inc. and Meta Platforms Inc. to new record highs overnight. The Nikkei Average concluded the session with a 1.21% gain at 39,849.14, having surged above the 40,000 mark for the first time since mid-October. The broader Topix Index ended up 0.86% at 2,773.03. The yen lingered near a two-week low against the dollar as traders adjusted their bets regarding a possible rate hike by the Bank of Japan next week.
Tech giants such as Advantest and SoftBank Group registered significant gains of 5.1% and 1.9%, respectively, buoyed by reports of Apple partnering with Broadcom on a custom AI processing chip, codenamed Baltra.
In South Korea, the stock market saw a third consecutive day of gains, with the Kospi Index rising by 1.62% to 2,482.12, led by major technology firms. Samsung Electronics saw a 3.5% increase, while SK Hynix added 2.5%.
Meanwhile, in Australia, markets experienced slight declines as a sharp drop in the unemployment rate last month led traders to reduce their expectations for rate cuts. The benchmark S&P/ASX 200 fell by 0.28% to 8,330.30, its lowest point in three weeks, amid a third successive session of losses. Similarly, the broader All Ordinaries Index decreased by 0.27% to 8,586.90.
Shares of Insignia Financial surged over 11% on the news that private equity firm Bain Capital was in advanced talks regarding a takeover bid for the wealth management company. Across the Tasman Sea, New Zealand's benchmark S&P/NZX-50 Index closed down by 0.54% at 12,692.72.
Overnight, U.S. stocks generally rose, and the dollar reached a two-week high as inflation data aligned with expectations, supporting the notion that the Federal Reserve will reduce interest rates by another quarter-point next week. U.S. data revealed that the consumer price index increased by 0.3% in November, marking the largest rise since April following consistent monthly increases of 0.2%.
On a year-over-year basis, inflation climbed to 2.7% last month, slightly up from 2.6% in October. Core inflation remained steady, also rising by 0.3% for the fourth straight month, with the annual rate at 3.3%, matching forecasts.
The Nasdaq Composite, heavy in tech stocks, surged 1.8% to a new record high, closing above 20,000 for the first time. The S&P 500 rose 0.8%, nearly reaching another all-time high, while the Dow Jones edged down by 0.2%.
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