On Tuesday, Asian stock markets exhibited mixed results as investors awaited crucial interest rate decisions this week from the Federal Reserve, the Bank of Japan, and the Bank of England. These decisions are seen as key indicators for the direction of interest rates in 2025.
The dollar gained slightly against major currencies as traders anticipated a hawkish stance, with a 25-basis point interest rate cut expected from the Federal Reserve on Wednesday. In Asia, both gold and oil prices saw modest increases in trading.
China’s Shanghai Composite Index dropped 0.73% to 3,361.48 following a volatile trading session. This decline came despite Premier Li Qiang urging officials to expedite essential economic reforms for the upcoming year. Similarly, Hong Kong’s Hang Seng Index decreased by 0.48% to 19,700.48.
In Japan, markets closed slightly lower, with the yen stabilizing after a six-day losing streak. These movements occurred ahead of anticipated central bank announcements from the U.S. and Japan on Wednesday and Thursday. The Nikkei average fell by 0.24% to 39,364.68, and the broader Topix index declined by 0.37% to 2,728.20.
Leading the losses was Advantest, a chip-testing equipment manufacturer, which closed 9.4% lower. Conversely, Zojirushi, a household appliances company, soared by 16.7% after raising its operating profit forecast for the year ending in November. Additionally, SoftBank Group shares climbed 4.4% following President-elect Donald Trump's statement that the company would invest $100 billion in the U.S. over the next four years.
South Korean stocks experienced a downturn amid reports that officials sought to question impeached President Yoon Suk Yeol regarding his brief attempt to declare martial law. The Kospi average dropped 1.29% to 2,456.81 as the Constitutional Court began reviewing Yoon's impeachment. Heavyweight Samsung Electronics saw a 2.5% decline after Goldman Sachs lowered both its stock price target and earnings estimates.
In Australia, the markets broke a five-day losing streak with notable gains. The benchmark S&P/ASX 200 rose 0.78% to 8,314, propelled primarily by a surge in financial stocks. The broader All Ordinaries index increased by 0.76% to 8,558.60. Major banks, including the Commonwealth Bank of Australia, ANZ, and Westpac, saw increases ranging from 0.7% to 1.6%. Meanwhile, lower oil prices affected the energy sector, with Woodside Energy falling 1% and Santos decreasing by 0.6%. Karoon Energy plummeted 9.7% after adjusting its production forecast. Investors largely disregarded findings from a private survey indicating a decline in Australian consumer sentiment for December.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX-50 index ended the day 0.91% higher at 12,914.30.
In the United States, stock markets mostly declined overnight as Treasury yields leveled off in anticipation of the Fed's rate cut and upcoming rate decisions from other major global central banks.
In economic updates, a survey reported that U.S. economic output reached its highest point in nearly three years by the end of 2024. The tech-heavy Nasdaq Composite climbed 1.2%, achieving a new record closing high. The S&P 500 rose by 0.4%, whereas the Dow Jones Industrial Average slipped 0.3%, marking its eighth consecutive day of losses and its lowest closing level in nearly a month.
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