Stock markets across Asia-Pacific traded mostly higher on Tuesday, drawing momentum from a record-setting rally on Wall Street where investor enthusiasm for artificial intelligence (AI) technology stocks remained a key driver. The positive global sentiment helped markets look past geopolitical tensions in Venezuela.
Regional Markets Follow Wall Street's Lead
Major indices in the region posted solid gains. Hong Kong's Hang Seng Index (HSI) jumped 448 points, or 1.7%, to reach 26,795. Japan's Nikkei 225 advanced by 358 points, translating to a gain of 0.69%. Mainland China markets also participated in the upswing, with the Shanghai and Shenzhen composites surging 1% and 0.7% respectively. South Korea's Kospi was a relative laggard, trading nearly flat with a minor gain of just 6 points in early trading (around 9:05 AM IST).
The rally was inspired by a powerful performance on Wall Street. The Dow Jones Industrial Average soared to a new closing high, bolstered by strong showings from tech giants like Amazon and Meta, alongside energy companies. The S&P 500 and Nasdaq Composite indices also ended the session in positive territory.
Focus Shifts to US Economic Indicators and Fed Policy
As the global equity rally continues, market attention is now firmly fixed on the United States. A series of crucial economic indicators scheduled for release this week are expected to shape expectations for the Federal Reserve's next interest rate decision, due later this month.
Gains on Wall Street were reinforced by fresh data showing US manufacturing activity contracted for the tenth consecutive month in December. This ongoing trend is seen by some investors as potentially giving the Federal Reserve more room to consider cutting interest rates. Market participants are now keenly awaiting upcoming employment data, which could further influence the central bank's policy stance.
Investors largely brushed aside the surprise US operation over the weekend that saw Venezuelan President Nicolas Maduro and his wife flown to New York to face drug charges.
Company-Specific Moves and Commodity Markets
In individual stock news, shares of South Korean automaker Hyundai initially surged after it showcased a prototype of its AI-powered humanoid robot, named Atlas, at the Consumer Electronics Show in Las Vegas. The company stated the robot is expected to begin operations at a US manufacturing facility by 2028. However, the stock later pared a portion of those early gains.
In Australia, the broader equity market edged lower despite a massive rally in BlueScope Steel. The steelmaker's shares jumped more than 20% after it announced a review of an $8.8 billion joint takeover proposal from a US-based rival and a diversified Australian firm.
In energy markets, oil prices dipped after rising 1.7% on Monday. Investors continued to weigh the potential impact of Venezuela's political upheaval on global supply. Analysts noted that while Venezuela holds vast oil reserves, any rapid increase in its output would be hampered by ageing infrastructure, low prices, and persistent political uncertainty, especially as markets already contend with a supply glut.
