Asian stock markets moved mostly sideways on Monday as thin year-end trading volumes and reduced investor participation kept activity muted across the region. With many global investors already having completed year-end positioning, markets lacked strong catalysts, resulting in tight trading ranges despite generally positive sentiment around global monetary policy easing.
Investor confidence was supported by expectations that the U.S. Federal Reserve could continue cutting interest rates into 2026 following its recent policy move. Lower interest rate forecasts have helped underpin risk appetite globally, particularly benefiting equities in emerging markets and interest rate–sensitive sectors. However, caution prevailed in Asia as traders awaited clearer signals on global growth and policy direction heading into the new year.
U.S. markets offered limited direction. Wall Street indices closed marginally lower on Friday, though optimism around a potential “Santa Claus rally” remained intact. Meanwhile, U.S. stock index futures traded largely flat during Asian hours, reinforcing the subdued regional mood.
South Korea stood out as a notable outperformer. The benchmark KOSPI index surged 1.7%, driven by strong gains in heavyweight technology stocks. Chipmaker SK Hynix jumped nearly 6% after being removed from an investment warning list, boosting confidence in the semiconductor sector. Samsung Electronics also advanced around 1.5%, adding further support to the index.
Elsewhere in Asia, movements were modest. Japan’s Nikkei 225 slipped 0.3%, while the broader TOPIX edged up 0.1%. China’s Shanghai Composite gained 0.3%, reflecting cautious optimism, while Hong Kong’s Hang Seng index rose 0.4%. Singapore’s Straits Times Index remained largely flat, India’s Nifty 50 was little changed, and Australia’s S&P/ASX 200 declined 0.3%.
As Asia approaches 2026, investors are increasingly focused on how U.S. interest rate cuts, global economic growth trends, and regional policy developments will shape market performance. While near-term trading remains quiet, expectations of easier monetary conditions continue to provide a supportive backdrop for Asian equities.


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