Asian stock markets largely opened the week on a positive note on Monday, trading mostly in the green as investors adopted a cautiously optimistic stance. The focus remains squarely on the upcoming release of the minutes from the US Federal Reserve's December policy meeting, scheduled for Tuesday, for fresh cues on the future path of interest rates.
Market Performance Across Key Indices
In Hong Kong, the Hang Seng Index traded at 25,944, marking a gain of 125 points or 0.49%. Japan's benchmark, however, bucked the trend as the Nikkei fell over 200 points to 50,550. Mainland China's markets saw modest gains, with the Shanghai composite adding 0.4% and the Shenzhen component rising 0.19%. South Korea's Kospi was a standout performer, gaining 1.6% to reach 4,197 by 8:40 AM Indian Standard Time (IST).
With only a few trading sessions left in the year, market sentiment has found support from expectations of potential further cuts in US interest rates. Confidence persists that the rally led by technology stocks still has momentum. Earlier in December, the Federal Reserve reduced borrowing costs as anticipated but struck a more measured tone, indicating rates could hold steady at its next meeting. This came after two policymakers opposed the cut and one advocated for a deeper reduction.
Precious Metals Retreat from Record Highs
On the commodities front, gold and silver prices pulled back after surging to record levels in recent days. Both metals had benefited from robust buying interest, fueled by the view that lower interest rates enhance their appeal. Their traditional role as safe-haven assets during periods of geopolitical uncertainty also provided support.
Recent tensions, including US strikes in Nigeria and a blockade involving Venezuelan oil tankers, added to their attractiveness. On Monday, gold was hovering near $4,500 after peaking just below $4,550 late last week. Silver slipped to $77.50, having briefly touched a record high of $80. The sharp rise in silver has also been underpinned by tightening supply and rising industrial demand.
Oil Recovers and Geopolitical Watch
Oil prices managed to recover some ground after falling more than two percent on Friday. Markets are assessing developments from weekend talks between US President Donald Trump and Ukraine's President Volodymyr Zelensky regarding possible peace proposals. President Trump stated on Sunday that an agreement to end Russia's invasion of Ukraine was closer than ever, though he acknowledged no clear breakthrough on territorial questions had been achieved. He added that it could become evident within weeks whether the nearly four-year-long conflict, which has claimed tens of thousands of lives, could be brought to an end.
As the year draws to a close, investors are navigating a mix of cautious optimism driven by monetary policy hopes and the ever-present undercurrents of geopolitical developments and commodity market adjustments.
