Asian stocks gained traction on Tuesday, buoyed by an overnight rally in major U.S. tech stocks during a low-volume session marking the start of a holiday-shortened trading week.
In regional markets, Asian indices experienced a modest range of movement before closing in positive territory. Notably, both Hong Kong and Sydney had abbreviated sessions due to Christmas Eve festivities. Despite a stronger U.S. dollar and higher bond yields, both gold and oil maintained limited gains during Asian trading.
A significant driver for Chinese and Hong Kong markets was the announcement from China's Finance Ministry regarding plans to amplify public spending, with a particular emphasis on bolstering domestic demand in the coming year. This development saw Shanghai’s Composite Index surge by 1.26% to close at 3,393.53, while Hong Kong's Hang Seng Index rose by 1.08%, finishing at 20,098.29.
Contrastingly, Japanese markets closed on a weaker note after Finance Minister Katsunobu Kato expressed concerns about the volatility in foreign exchange markets. The Bank of Japan's meeting minutes indicated an agreement among policymakers in October to continue elevating interest rates should the economic conditions align with their projections. As a result, the Nikkei average decreased by 0.32% to 39,036.85, whereas the broader Topix index achieved a slight gain, ending at 2,727.26. Notable declines were observed in heavyweight stocks such as SoftBank and Fast Retailing, which fell by 1.4% and 0.6%, respectively.
Conversely, automotive giants Honda Motor, Nissan Motor, and Mitsubishi Motors saw significant increases — up 12.2%, 6%, and 7.2%, respectively — following news of their commencement of merger discussions, slated for completion in 2026.
In Korea, Seoul's stock index remained relatively unchanged amid ongoing political turmoil. Investors digested data indicating a sharp decline in South Korean consumer sentiment, marking its lowest in over two years. The Kospi index slightly decreased, closing at 2,440.52 after the main opposition party initiated impeachment proceedings against Prime Minister and Acting President Han Duck-soo.
Australian stocks made modest advances, with the Australian dollar under pressure due to market speculation about potential rate cuts by the Reserve Bank of Australia in February. Minutes from the RBA's December 9–10 meeting revealed increased board confidence in the inflation trajectory, indicating a willingness to ease policy restrictions if forthcoming data meets or falls short of projections. Consequently, the S&P/ASX 200 inched up 0.24% to 8,220.90, led by technology and energy sector gains, while the broader All Ordinaries index rose by 0.22% to 8,471.50.
Across the Tasman Sea, New Zealand’s S&P/NZX-50 index climbed 0.67%, closing at 13,074.74.
On the U.S. front, stock indices rose and Treasury yields reached near seven-month peaks following mixed economic reports. December saw a drop in U.S. consumer confidence, yet November highlighted a rebound in new home sales and an uptick in core capital goods orders. The Dow gained 0.2%, marking its third consecutive session of growth, while the S&P 500 increased by 0.7%, and the tech-heavy Nasdaq Composite advanced 1%.
In observance of Christmas, U.S. markets are scheduled to close early today and will remain closed on Wednesday.
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