Most Asian stocks increased on Monday following a significant rally in the major U.S. stock indexes. These indexes closed their best week in two months on Friday, fueled by optimism regarding potential interest rate cuts.
Despite these gains, regional progress was somewhat limited due to a holiday in the United States and uncertainty surrounding the inauguration of U.S. President-elect Donald Trump later in the day. Markets are on alert for substantial policy announcements and potential shifts in U.S. trade policies, which could introduce significant uncertainty for businesses.
In Asian trading, the dollar index experienced a decline while the Japanese yen remained near a one-month high, driven by expectations that the Bank of Japan (BOJ) might increase interest rates during its forthcoming policy meeting.
Gold saw a modest increase, whereas oil prices dipped slightly after a gain of over 1 percent the previous week, marking their fourth consecutive weekly rise.
China's Shanghai Composite Index ended slightly higher at 3,244.38, having relinquished early gains after an amicable call between President Trump and President Xi touched on topics including trade, TikTok, and fentanyl.
Earlier, the People's Bank of China sustained its interest rates for the third month in a row, maintaining the one-year LPR at 3.1 percent and the five-year LPR at 3.6 percent, amid ongoing uncertainty regarding the direction of the new U.S. administration.
Hong Kong's Hang Seng Index surged by 1.75 percent to 19,925.81, driven by tech stocks benefiting from China's subsidy initiatives. JD.com saw a 7.2 percent increase, while Alibaba rose by 4.5 percent.
Real estate stocks also gained momentum after a court extended the deadline for the troubled property developer Country Garden to reach an agreement with its creditors until the following month.
Japanese markets saw a rally as investors anticipated a possible rate hike by the BOJ by the conclusion of a two-day policy meeting on Friday. The Nikkei average rose 1.17 percent to 38,902.50, rebounding after three weeks of declines.
The broader Topix Index finished 1.19 percent higher at 2,711.27. Automakers were at the forefront of the gains, with Honda Motor up by 1.4 percent, and both Toyota Motor and Subaru increasing by about 3 percent.
Daiichi Sankyo's shares jumped 8.2 percent following the FDA's approval of a breast cancer treatment developed in partnership with AstraZeneca.
In economic developments, government data indicated a 3.4 percent rise in Japan's core machinery orders in November compared to the previous month, surpassing analysts' forecasts.
In Seoul, stocks fell for the second consecutive day, with the Kospi average slipping 0.14 percent to 2,520.05, weighed down by declines in chip and auto stocks.
Australian markets closed on a positive note, driven by financial, tech, and real estate stocks. The benchmark S&P/ASX 200 index climbed 0.45 percent to 8,347.40, while the broader All Ordinaries index rose 0.43 percent to finish at 8,594.40.
Meanwhile, across the Tasman, New Zealand's benchmark S&P/NZX-50 index declined by 0.32 percent to 13,088.31.
U.S. stocks saw a sharp increase on Friday, achieving weekly gains for the first time in three weeks amid optimism about the economic outlook and the future path of interest rates.
In the economic sphere, industrial production increased significantly more than anticipated in December, and single-family homebuilding in the U.S. reached a 10-month high, according to separate reports.
The tech-heavy Nasdaq Composite climbed 1.5 percent, while the S&P 500 increased by 1 percent, and the Dow rose by 0.8 percent, marking their most substantial weekly gains since the week of the November presidential election.
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