(Dec 22): Asian equities opened higher on Monday, tracking last Friday’s gains in US stocks that helped intensify bets for a strong finish to the year.
MSCI Inc’s gauge of Asia-Pacific shares rose 0.5%, with the tech sector leading gains. The measure capped a 1.9% weekly decline last Friday, its first in four weeks. US stock futures also advanced in early Asian trading on Monday. Elsewhere, oil climbed as US President Donald Trump intensified a blockade on Venezuela, boarding one tanker and pursuing another within weeks of first capturing a vessel. Bitcoin rose around 1% while silver hit another record high.
Hopes for a year-end rally have grown as dip buyers late last week helped equities recover from a slide driven by doubts over artificial intelligence (AI) exuberance and the scope for US Federal Reserve (Fed) easing. US stocks jumped 0.9% last Friday in a second day of gains, wiping out the week’s loss as volumes spiked during a quarterly options and futures expiry, and as traders positioned for a rally into 2026.
“We are now likely to see markets continue higher,” said Tony Sycamore, an analyst at IG in Sydney. “The one big elephant in the room remains the valuations in AI and where we go from here.”
Focus in Asia will be on China’s one-and five-year loan prime rates later on Monday. Commercial banks are likely to keep lending rates unchanged for a seventh month as expectations grow that the People’s Bank of China may ease policy next year.
See also: Asian shares advance as US CPI backs rate-cut bets
“A weaker economy heading into the fourth quarter has raised the urgency for more support to prevent a sharper slowdown, with year-end policy meetings hinting slightly at more monetary easing in 2026,” said Eric Zhu from Bloomberg Economics. “We see the next rate cut early next year, guiding lending rates lower.”
Chinese stocks will also be watched when markets open after Republican lawmakers in the House Select Committee on China asked the Pentagon to list more than a dozen companies as military firms.
Elsewhere, UK and US growth readings are due this week, as well as minutes from the Reserve Bank of Australia’s December policy meeting which may give clues to whether it could hike in February. In Japan, Tokyo inflation as well as national jobs data are due, helping traders assess the outlook for Bank of Japan policy after its cautious hike last week.
See also: Asian stocks fall as traders pull back from tech
A gauge of the dollar edged slightly lower on Monday while Treasuries were steady. Yields on US bonds were higher last Friday as New York Fed president John Williams signalled no urgency to cut interest rates again, citing recent employment and inflation data. Cleveland Fed president Beth Hammack echoed that sentiment in an interview with The Wall Street Journal, reinforcing expectations for a pause after a string of recent reductions. Even so, traders continue to bet on two rate cuts in 2026.
“We think inflation worries voiced by some hawks on the board are overdone and overall risks in the labour market are clearly to the downside,” Citigroup Inc strategists including Adam Pickett wrote in a note to clients. But with only one clean set of data to be published prior to next month’s meeting, “this makes current market pricing of a 30% probability of a cut in January look fair”, they wrote.
Corporate news
- A group of private equity firms led by Permira and Warburg Pincus has agreed to acquire Clearwater Analytics Holdings Inc in a deal valuing the investment and accounting software maker at US$8.4 billion ($10.9 billion) including debt.
- Chinese chipmakers are rushing to the initial public offering market, raising funds that are key to the nation’s goal of technological self-reliance and winning the global AI race.
- Seven & i Holdings Co’s chief executive is pressing its US convenience-stores business to deliver a faster turnaround as the retailer seeks a public listing of the unit to fund new investment and lift shareholder returns.
- Li Ka-shing and his family set in motion a series of deals this year that stand to completely transform the Hong Kong billionaire’s business empire.
Some of the main moves in markets:
Stocks
- S&P 500 futures had risen 0.2% as of 9.26am Tokyo time on Monday
- Hang Seng futures rose 0.5%
- Japan’s Topix rose 0.8%
- Australia’s S&P/ASX 200 rose 0.7%
- Euro Stoxx 50 futures fell 0.1%
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Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1714
- The Japanese yen rose 0.1% to 157.54 per dollar
- The offshore yuan was little changed at 7.0331 per dollar
- The Australian dollar was little changed at US$0.6616
Cryptocurrencies
- Bitcoin rose 0.7% to US$88,779.7
- Ether rose 1.5% to US$3,016.89
Bonds
- The yield on 10-year Treasuries was little changed at 4.15%
- Japan’s 10-year yield advanced 3.5 basis points to 2.050%
- Australia’s 10-year yield advanced four basis points to 4.78%
Commodities
- West Texas Intermediate crude rose 0.6% to US$56.88 a barrel
- Spot gold rose 0.5% to US$4,362.53 an ounce
Uploaded by Tham Yek Lee
