Asian equities experienced a largely positive trend on Monday, driven by anticipation of the Federal Reserve’s policy meeting minutes and hopes for further US interest rate cuts. The tech-led rally, which has been a significant factor in the market’s upward trajectory, is expected to continue, offsetting concerns about valuations in the tech sector.
The Federal Reserve’s decision to lower borrowing costs earlier in December, while indicating a potential pause in future rate cuts, has contributed to the market’s optimism. The meeting minutes, set to be released on Tuesday, will be closely scrutinized for insights into the central bank’s plans for 2026. The prospect of rate cuts has been a key driver of global market growth this year.
In early trading, Hong Kong, Shanghai, Seoul, Singapore, Taipei, and Manila saw gains, while Tokyo, Sydney, and Wellington experienced declines. The precious metals market saw a retreat, with gold and silver slipping from their recent record highs. Gold, which had peaked at nearly $4,550 on Friday, was trading around $4,500 on Monday, while silver dropped to $77.50 after reaching a record $80.
The surge in precious metals has been attributed to their safe-haven status, as well as expectations of further rate cuts. The demand for silver, in particular, has been driven by its use in solar panels, electric vehicles, and electronics, resulting in a “generational bubble,” according to Tony Sycamore at IG.
Oil prices rose, recovering from a decline of over 2% on Friday, which was sparked by concerns over the meeting between US President Donald Trump and Ukrainian President Volodymyr Zelensky. Trump stated that a deal to end the conflict in Ukraine was closer than ever, but no significant breakthrough was reported.
As the year draws to a close, markets are poised to end on a positive note, with investors looking ahead to the release of the Federal Reserve’s meeting minutes and potential future rate cuts. The key figures at 0230 GMT included the Nikkei 225 down 0.3% at 50,550.17, the Hang Seng Index up 0.8% at 26,016.01, and the euro/dollar up at $1.1784. The West Texas Intermediate crude oil price was up 0.7% at $57.14 per barrel, while the Dow remained flat at 48,710.97.