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FX.co ★ Asian Markets Trade Mostly Higher

Asian Markets Trade Mostly Higher

Asian stock markets largely advanced on Tuesday, buoyed by encouraging signals regarding tariff policy from President-elect Donald Trump's economic team. This development suggested a measured approach to tariff increases, aimed at preventing inflation surges. The U.S. dollar also softened against most Asian currencies. Previously, most Asian markets had ended Monday on a lower note.

In Australia, the stock market experienced modest gains on Tuesday, bouncing back from a three-session losing streak, supported by mixed signals from Wall Street. The S&P/ASX 200 rose above the 8,200 mark, driven by strength in mining and energy sectors amidst robust commodity prices. However, gains were somewhat tempered by weaknesses in financial and tech sectors.

Specifically, the S&P/ASX 200 Index climbed 18.70 points, or 0.23%, to reach 8,210.60, after peaking at 8,253.80 earlier. Meanwhile, the All Ordinaries Index increased by 21.20 points, or 0.25%, to 8,453.10. Previously, Australian stocks had sharply declined on Monday.

Leading the mining sector, BHP Group advanced nearly 1%, Rio Tinto gained 0.4%, while Fortescue Metals and Mineral Resources rose nearly 2% and over 2%, respectively.

Oil stocks rallied, with Origin Energy, Woodside Energy, and Santos each climbing around 1%, and Beach Energy inching up 0.3%.

However, technology stocks faced pressure; Block, owner of Afterpay, dipped 0.5%, Appen fell 2.5%, while Zip and WiseTech Global both lost nearly 1%. Xero, in contrast, was up slightly by 0.1%.

Gold miners generally saw an uptick, with Resolute Mining, Newmont, and Evolution Mining each edging up 0.4% to 0.5%, while Northern Star Resources posted a gain of almost 1%. Gold Road Resources remained stable.

Conversely, the major banks showed mixed results. Westpac and National Australia Bank slipped by 0.4% to 0.5%, Commonwealth Bank declined nearly 1%, and ANZ Banking remained unchanged.

City Chic Collective shares surged by almost 16% following strong holiday sales performance, despite a reported 3.6% revenue decline in the latter half of 2024.

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In currency movements, the Australian dollar was trading at $0.618.

Meanwhile, Japan's stock market suffered notable losses on Tuesday post-holiday, extending declines from previous sessions, with the Nikkei 225 dropping below the 38,500 level amid broad sector weakness, notably among heavyweight financial and tech stocks.

The Nikkei 225 Index closed its morning session at 38,469.58, witnessing a fall of 720.82 points or 1.84%, despite hitting a low of 38,332.91 earlier. Japanese stocks had ended sharply lower on Friday before the Monday holiday.

Prominent declines included SoftBank Group, down over 2%, Fast Retailing of Uniqlo fame, down more than 1%, and automaker Honda, down nearly 2%, while Toyota edged up 0.2%.

The tech sector struggled, with Advantest falling over 6% and Tokyo Electron by more than 2%, whereas Screen Holdings rose over 1%.

In banking, Mitsubishi UFJ Financial dropped close to 2%, Mizuho Financial eased 0.2%, and Sumitomo Mitsui Financial fell over 1%.

Among major exporters, Panasonic and Mitsubishi Electric lost about 1% each, while Sony fell over 1%. Canon saw a slight increase of 0.4%.

Significant losses also hit Furukawa Electric, down more than 5%, Socionext, dropping almost 5%, and Yaskawa Electric, sliding over 4%. Also, Fujikura, Lasertec, and Disco each fell close to 4%, with Mercari, Mitsubishi Heavy Industries, CyberAgent, Nissan Motor, and Ebara each declining roughly 3%.

Conversely, Ryohin Keikaku surged more than 6%, Trend Micro jumped almost 4%, M3 gained over 3%, and Idemitsu Kosan added nearly 3%.

The U.S. dollar traded in the upper 157 yen-range on Tuesday.

Elsewhere in Asia, markets exhibited positive momentum, with China up 1.2%, while New Zealand, Hong Kong, Malaysia, Taiwan, and Indonesia rose between 0.2% and 0.8% each. However, Singapore and South Korea saw slight losses of 0.1% each.

On Wall Street, stocks initially declined during Monday’s session but recovered significantly as trading progressed. The S&P 500 rebounded strongly to enter positive territory, whereas the Nasdaq remained under pressure.The S&P 500 experienced a modest increase, climbing 9.18 points, or 0.2%, to settle at 5,836.22. In contrast, the Nasdaq faced a decline, dropping 73.53 points, or 0.4%, to reach a one-month closing low of 19,088.10. The Dow Jones Industrial Average showed resilience, maintaining positive momentum throughout most of the trading session and eventually closing up by 358.67 points, or 0.9%, at 42,297.12.

In Europe, key markets demonstrated a downward trend. The German DAX Index decreased by 0.4%, with both the U.K.'s FTSE 100 Index and the French CAC 40 Index experiencing declines of 0.3%.

On the commodities front, crude oil prices surged to a five-month high on Monday. This increase was driven by concerns over potential supply disruptions following the United States' implementation of comprehensive sanctions on Russian oil exports. Additionally, a stronger U.S. dollar exerted further pressure. West Texas Intermediate Crude oil futures for February advanced $2.25, nearly 3%, concluding at $78.82 per barrel.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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