Asian Stocks Climb on Tech Boost Amid Holiday-Reduced Trading
Most Asian stock markets advanced on Tuesday, supported by a rebound in technology stocks tracking gains in their U.S. counterparts, although trading volumes remained light ahead of the Christmas break.
Wall Street Gains Provide Positive Momentum
Regional markets drew inspiration from Wall Street, which closed higher on Monday as technology stocks recovered from last week’s steep losses. U.S. stock index futures remained flat in Asian trading. Both Wall Street and most Asian markets are set for shortened trading sessions on Tuesday.
Recent losses in Asian markets were driven by the Federal Reserve signaling a slower pace of interest rate cuts in 2025, dampening sentiment for risk-driven assets.
Japan Markets Mixed; Honda Surges on Merger Talks
Japan’s Nikkei 225 and TOPIX indexes dipped slightly on Tuesday. However, attention focused on automakers Honda and Nissan, which confirmed merger talks slated for completion by 2026.
Honda’s shares soared 15%, bolstered by the announcement of a 1.1 trillion yen ($7 billion) share buyback. In contrast, Nissan’s stock traded flat after erasing earlier losses, following a sharp rise on Monday when the merger news surfaced. Mitsubishi Motors, in which Nissan holds a 34% stake, gained 3.6% and may also join the merger.
If completed, the Honda-Nissan deal would create the world’s third-largest automaker by sales. However, analysts expressed concerns over the cautious timeline, noting ongoing declines in automaker sales.
Chinese Stocks Rally on Stimulus Hopes
Chinese markets saw gains, with the CSI 300 and Shanghai Composite indexes rising 0.7% each. Hong Kong’s Hang Seng index jumped 1% on the back of tech stock gains.
Investor optimism grew amid reports of potential fiscal stimulus measures from Beijing to boost economic growth. Upcoming purchasing managers’ index data is expected to provide further insight into Asia’s largest economy.
Broader Asian Market Performance
Broader Asian markets mostly edged higher during holiday-thinned trading. Australia’s ASX 200 rose 0.1%, with Reserve Bank minutes hinting at an eventual decline in interest rates.
South Korea’s KOSPI fell 0.2%, weighed down by political concerns despite gains in tech stocks. Singapore’s Straits Times Index added 0.5%, while India’s Nifty 50 futures pointed to a weak start, as the index struggled with recent steep losses.
