Asian equity markets presented a mixed performance on Monday, with most ending the session either unchanged or in decline, albeit with a notable exception in Seoul where shares rallied. This uptick followed a court ruling which rejected the appeal against the arrest warrant for impeached President Yoon Suk Yeol by his legal team.
Japan's markets experienced a downturn, primarily owing to profit-taking activities after the Nikkei Index reached its record year-end close. Meanwhile, stocks in China and Hong Kong exhibited a sluggish trend, influenced by ongoing U.S.-China trade tensions and investor anticipation of clarity on stimulus policy execution.
Oil prices retreated from near three-month peaks during Asian trading hours, spurred by concerns related to sanctions and the impact of a stronger dollar following favorable U.S. House Speaker election outcomes. Concurrently, gold prices edged lower as investors awaited the release of the Federal Reserve's meeting minutes set for Wednesday and the forthcoming December payroll report on Friday.
In China, the Shanghai Composite Index dipped by 0.14% to 3,206.92 as the onshore yuan reached a significant threshold for the first time since late 2023, driven by reports of the People's Bank of China's plans to issue the largest-ever offshore yuan bonds in Hong Kong this month. Meanwhile, Hong Kong's Hang Seng Index decreased by 0.36% to 19,688.29, following a volatile session, despite a private sector survey indicating a faster expansion in China's service sector at the close of 2024.
Japan's Nikkei 225 Index fell by 1.47% to 39,307.05 on the first trading day of 2025, after being closed since last Tuesday for New Year celebrations. The broader Topix Index closed down 1.02% at 2,756.38, while the yen weakened under the pressure of rising U.S. Treasury yields. Early in the day, indicators from Japan's service sector pointed towards increasing prices and wages, potentially backing a January rate hike from the Bank of Japan.
In Seoul, stocks posted robust gains with a notable rise in tech stocks. This boost was partly due to Taiwan-listed Hon Hai Precision Industry Co.'s record revenue report for the fourth quarter. Consequently, the Kospi average climbed by 1.91% to 2,488.64, driven by significant gains in Samsung Electronics, SK Hynix, Naver, and LG Energy Solution.
Australian markets experienced fluctuations before closing slightly higher, led by gains in technology stocks, while miners underperformed following a decline in iron ore prices below USD 100 per ton. Across the Tasman, New Zealand's S&P/NZX-50 Index ended marginally higher at 13,072.93.
In the United States, markets closed sharply higher on Friday after an uncertain start to the new year. Shares in major tech companies surged, buoyed by expectations of continued investment in artificial intelligence. Bond yields saw a slight decrease after data showed U.S. manufacturing activity had contracted at a slower pace in December. The tech-focused Nasdaq Composite rose by 1.8%, the S&P 500 enhanced by 1.3%, breaking a five-day losing streak, while the Dow Jones Industrial Average increased by 0.8%.
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