Asia report: Most market rise in quiet Christmas Eve trading

Asia-Pacific markets closed mostly higher on Christmas Eve, buoyed by strong performances in US tech stocks that drove Wall Street gains overnight.

The potential merger of Japanese auto giants Honda and Nissan to create the world’s third-largest carmaker was also in focus.

“It’s never too late to believe in Santa,” quipped Swissquote senior analyst Ipek Ozkarseskaya.

“Investors on Monday were shrugging off the bad news of the past week - especially the one that suggested that the Federal Reserve would cut its rates only two times in 2025 due to a too resilient US economy.

“Yesterday’s data showed that the US durable goods orders fell more than expected in November, the new home sales rebounded slightly less than expected and the consumer confidence unexpectedly dropped in December.”

Ozkardeskaya said that bag of bad news helped temper the latest hawkish shift in Fed expectations.

“As such, the buyers are out and buying.

“The S&P 500 rebounded 0.73%, Nasdaq 100 rallied more than 1% and even the European Stoxx 600 eked out a small gain, as Novo Nordisk in Denmark jumped more than 5.5% as investors rushed in to buy a dip on bet that the weight loss drugs are here to stay.”

Most markets manage gains on last day before Christmas

In Japan, the Nikkei 225 fell 0.32% to close at 39,036.85, while the broader Topix index edged up 0.02% to 2,727.26.

Notable gains in the automotive sector offset broader market weakness.

Honda Motor surged 12.22%, and Nissan rose 6% after both companies announced formal merger discussions on Monday, which could create the world’s third-largest automaker by sales.

However, declines in companies like Toho, which dropped 6.19%, weighed on the Nikkei.

Chinese markets performed strongly, with the Shanghai Composite gaining 1.26% to 3,393.53 and the Shenzhen Component rising 1.27% to 10,671.43.

Industrial stocks led gains, with Pengxin International Mining up 10.11%, Sunway Co advancing 10.06%, and Guangxi Wuzhou Communications rising 10.04%.

The Hang Seng Index in Hong Kong climbed 1.08% to 20,098.29, driven by robust performances from key players.

Orient Overseas International jumped 7.34%, BYD Electronic International gained 5.7%, and Xinyi Solar Holdings added 4.98%, reflecting optimism in the tech and renewable energy sectors.

South Korea's Kospi 100 rose modestly by 0.16% to 2,434.98 despite a notable dip in consumer sentiment, which fell to its lowest level in over two years.

Industrial names such as LS Industrial Systems rose 3.49%, and Korea Zinc added 2.9%.

Australia's S&P/ASX 200 edged up 0.24% to 8,220.90, driven by gains in lithium and real estate stocks.

Arcadium Lithium soared 7%, while Iperionx advanced 4.74%.

In New Zealand, the S&P/NZX 50 rose 0.67% to 13,074.74, with Eroad up 4.85% and Ryman Healthcare gaining 3.49%.

The yen held steady against the dollar, with the greenback last down 0.05% on the Japanese currency at JPY 157.09.

The Australian dollar weakened slightly, with the dollar last up 0.24% at AUD 1.6043, while it rose 0.11% on the Kiwi to change hands at NZD 1.7722.

Oil prices gained, with Brent crude futures last up 0.8% on ICE at $73.21 per barrel, and the NYMEX quote for West Texas Intermediate climbing 0.81% to $69.80.

Consumer confidence slides in Korea, BoJ and RBA release meeting minutes

In economic news, South Korea’s consumer confidence declined to its lowest level in over two years, according to fresh data from the Bank of Korea.

The consumer sentiment index dropped to 88.4 in December, down more than 12 points from November, slipping further below the 100-point threshold that distinguishes optimism from pessimism.

In Japan, minutes from the Bank of Japan’s October monetary policy meeting revealed a cautious yet optimistic stance among policymakers.

The board reiterated its commitment to gradually raising interest rates, provided the economy aligns with its projections.

However, members expressed concerns about external risks, particularly uncertainty surrounding U.S. economic policy under the incoming administration.

While the October meeting occurred before the US presidential election, board members anticipated potential market volatility and significant policy shifts.

Domestically, BoJ members were more confident, citing expectations for wage growth to sustain consumption and support the central bank's 2% inflation target.

The board left interest rates unchanged at 0.25% in October and December, emphasising the need for vigilance in assessing economic and wage trends before further tightening monetary policy.

Analysts polled by Reuters were widely expecting the BoJ to raise rates to 0.50% by March, provided economic conditions remained favourable.

Down under, the Reserve Bank of Australia also released minutes from its December meeting, emphasising the need for a “sufficiently restrictive” policy stance until inflation showed sustained signs of moderating.

While the board gained confidence in inflation trends, risks to the outlook persisted.

A resilient labour market and persistent service inflation suggested that monetary policy might not be as restrictive as anticipated.

The board acknowledged that weaker-than-expected data could justify easing policy sooner, but stronger inflationary pressures could extend the tightening cycle.

Reporting by Josh White for Sharecast.com.