(Dec 15): Asian markets opened lower in the final full trading week of 2025 as mounting concerns over the earnings outlook for technology companies — and their massive spending on artificial intelligence (AI) — sapped risk sentiment.
MSCI’s equities gauge for the region fell 0.7%, with South Korea — a poster child for AI exuberance — slumping more than 1.6%, after a tech-led sell-off on Wall Street last Friday. In a sign that markets may be stabilising, equity-index futures for US benchmarks edged up on Monday.
Gold was set for a fifth day of gains after conflicting remarks from Federal Reserve (Fed) officials prompted traders to curb bets on further monetary easing in the US next year. Gold has surged more than 60% this year and silver has more than doubled — with both metals on track for their best annual performances since 1979.
Global risk appetite has been ebbing amid scepticism that tech stocks, which have propelled global benchmarks to record highs, can continue to warrant their lofty valuations and aggressive AI spending. Asian markets, strong outperformers this year, appear particularly vulnerable given the region’s heavy reliance on manufacturing the components underpinning the technology boom.
Friday’s moves underscored “the potential that we could see the AI bubble burst at some point in the near future”, said Nick Twidale, the chief market analyst of AT Global Markets in Sydney. “We have seen good growth for Asian markets on the back of AI in particular and tech in general over the last year, despite trade concerns, so I expect them to take a decent step back in trading today.”
See also: Asia’s rich drive US$200b revival in complex equity notes
From a recent sell-off in the shares of Nvidia Corp to Oracle Corp’s plunge after reporting mounting spending on AI, to souring sentiment around a network of companies exposed to OpenAI, signs of scepticism are increasing. Looking to 2026, the debate among investors is whether to rein in AI exposure ahead of a potential bubble popping or double down to capitalise on the game-changing technology.
The queasiness about the AI trade involves its uses, the enormous cost of developing it, and whether consumers ultimately will pay for the services. Those answers will have major implications for the stock market’s future.
Treasuries stabilised on Monday as debate raged in markets and among Fed officials on how much to ease policy next year.
See also: Global stocks hit all-time highs as rally widens
Cleveland Fed president Beth Hammack said she would prefer interest rates to be slightly more restrictive to keep putting pressure on inflation. Chicago Fed president Austan Goolsbee said he is projecting more interest-rate cuts for 2026 than many of his colleagues.
In Asia, a slew of Chinese data including retail sales and industrial production will be in focus. The reports will probably show the economy lost more speed in November, with slower consumption growth and a deeper decline in investment, according to Bloomberg Economics.
Also, confidence among Japan’s large manufacturers rose to the highest level in four years, reinforcing market expectations for the Bank of Japan (BOJ) to raise interest rates this week.
This week, the final flurry of major central bank policy meetings is due, including those from the Bank of England and the BOJ. A heavy slate of global data to help assess the direction of monetary policy in 2026 is also due, including a growth reading in New Zealand, European activity data and inflation prints in Canada and the UK.
“The Santa rally can’t get off the ground amid fresh AI valuation fears,” said Kyle Rodda, a senior analyst at Capital.com. “While hardly as high stakes as last week, there’s enough event risk there to keep investors on their toes, possibly providing the spark for that Santa rally — or equally, a deepening sell-off.”
Corporate news:
- China Vanke Co, the nation’s last major developer to have so far avoided default amid an unprecedented property crisis, has been left with little time to keep debt failure at bay after creditors spurned its proposal to push back a looming bond payment.
- Fortescue Ltd has agreed to acquire Canada-based explorer Alta Copper Corp in a deal that marks the Australian company’s first major foray beyond iron ore into other metals.
- iRobot Corp filed for bankruptcy after reaching a restructuring support agreement that will hand control of the consumer robot maker to Shenzhen PICEA Robotics Co, its main supplier and lender, and Santrum Hong Kong Co.
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Some of the main moves in markets:
Stocks
- S&P 500 futures had risen 0.2% as of 10.15am Tokyo time on Monday
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 fell 0.7%
- Hong Kong’s Hang Seng rose 1.7%
- The Shanghai Composite rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1731
- The Japanese yen was little changed at 155.85 per dollar
- The offshore yuan was little changed at 7.0535 per dollar
- The Australian dollar was little changed at US$0.6646
Cryptocurrencies
- Bitcoin rose 0.1% to US$88,594.45
- Ether fell 0.2% to US$3,075.85
Bonds
- The yield on 10-year Treasuries was little changed at 4.18%
- Japan’s 10-year yield was unchanged at 1.945%
- Australia’s 10-year yield advanced one basis point to 4.74%
Commodities
- West Texas Intermediate crude rose 0.4% to US$57.65 a barrel
- Spot gold rose 0.3% to US$4,311.99 an ounce
Uploaded by Tham Yek Lee
