Asia report: Most markets rise, Aussie unemployment surprisingly falls

Most markets in the Asia-Pacific region advanced on Wednesday, buoyed by Wall Street's overnight rally after US consumer price index inflation met expectations in November.

The upbeat sentiment was further supported by Australia's labor market data, which showed the unemployment rate dropping to an eight-month low in November, defying predictions of a rise.

“Asian markets climbed on Thursday, spurred by a tech-driven rally on Wall Street, as an expected US consumer inflation report strengthened predictions of a Federal Reserve interest rate cut next week,” said Patrick Munnelly at TickMill.

“Japan's Nikkei index surpassed 40,000 for the first time since mid-October, supported by gains in the chip sector.

“The yen's decline also aided the exporter-heavy index, as traders lowered their expectations for a Bank of Japan rate hike next week.”

Munnelly noted that the Australian dollar surged after employment figures far exceeded forecasts, bouncing back from Wednesday's drop following a Reuters report hinting that Beijing could allow further devaluation in renminbi next year.

“Given that China is Australia's largest trading partner, the Australian dollar is often viewed as a liquid stand-in for the yuan.

“The yuan held steady above a one-week low after the central bank set a slightly stronger official rate.”

Most markets in the green after overnight Wall Street rally

In Japan, the Nikkei 225 edged up to 39,849.14, while the broader Topix climbed 0.86% to 2,773.03.

Gains on Tokyo’s benchmark were led by technology and energy stocks, with Advantest soaring 5.1%, followed by DeNA Co and Chubu Electric Power, up 5.04% and 4.54%, respectively.

China’s mainland markets also posted robust gains - the Shanghai Composite rose 0.85% to 3,461.50, and the Shenzhen Component advanced 1% to 10,957.13.

Notable performers included Tande Co, Jilin Yatai Group, and Maoye Commercial, all surging over 10%.

Hong Kong's Hang Seng Index outperformed with a 1.2% rise to 20,397.05, driven by strength in consumer stocks.

China Mengniu Dairy led with a 7.12% gain, followed by China Resources Beer and Budweiser Brewing Company, which added 5.69% and 5.28%, respectively.

South Korea’s Kospi 100 surged 1.56% to 2,481.86, bolstered by sharp gains in individual stocks.

Kumyang rocketed 15.87%, while LG Energy Solution and LF Co gained 7.01% and 6.3%, respectively.

Australia bucked the regional trend, with the S&P/ASX 200 declining 0.28% to 8,330.30.

Losses in Sydney were driven by weakness in industrials and services - Ventia Services Group plummeted 22.56%, while Downer EDI and Eagers Automotive slid 5.95% and 5.7%, respectively.

In New Zealand, the S&P/NZX 50 fell 0.54% to 12,692.72, as energy and healthcare stocks struggled.

Mercury NZ dropped 3.03%, with Fisher & Paykel Healthcare and Skellerup Holdings also in the red.

In currency markets, the dollar was last down 0.08% on the yen to trade at JPY 152.33, while it slipped 0.55% against the Aussie to AUD 1.5615, and retreated 0.36% from the Kiwi, changing hands at NZD 1.7224.

Oil prices remained steady, with Brent crude futures inching down 0.08% on ICE to $73.46 per barrel, and the NYMEX quote for West Texas Intermediate dipping 0.06% to $70.25.

Unemployment surprisingly falls in Australia, Korean president refuses to resign

In economic news, Australia’s unemployment rate fell to 3.9% in November, its lowest level in eight months, defying expectations for a rise.

The decline from October’s 4.1% came as a surprise to economists, who had forecast an increase to 4.2%, according to a Reuters poll.

In South Korea, president Yoon Suk Yeol addressed the nation to affirm he would not resign despite mounting political pressure following his controversial martial law declaration last week.

Opposition parties and public criticism had intensified, with the leader of Yoon’s ruling People Power Party reportedly supporting a proposal for a second parliamentary vote to impeach him.

The first impeachment attempt last weekend failed, after members of Yoon’s party largely boycotted the vote.

Meanwhile, a Reuters survey revealed widespread concern among Japanese businesses over the impact of US president-elect Donald Trump’s upcoming term.

Of the companies polled, 73% anticipated negative effects on their operations, pointing to fears over heightened US-China trade tensions and potential tariffs exceeding 60% on Chinese imports.

A minority of respondents expressed optimism, expecting Trump’s policies, such as tax cuts and deregulation, to boost US domestic demand, creating opportunities for growth.

Reporting by Josh White for Sharecast.com.