Asian markets end the session in positive territory following China’s key rate announcement

Indices

The main Asian indices are exhibiting a positive trajectory, with each benchmark reflecting unique drivers and sector rotations. The Nikkei 225 50.4K closed at a robust level, posting a gain of 1.81. This upward momentum is primarily attributed to strong performance in semiconductor and technology shares, signaling investor enthusiasm for AI-related opportunities. The Hang Seng Index 25.8K advanced by 0.43, buoyed by renewed interest in Chinese pharmaceutical and technology firms. Meanwhile, the Shanghai Composite Index 3.92K rose 0.69, led by gains in the energy, financials, and materials sectors. All three indices are currently exhibiting a FLAT micro-trend, indicative of a consolidation phase as markets digest recent policy actions and await further macroeconomic signals.

Stocks

Stock leadership is highly fragmented and sector-driven. In Japan, semiconductor and tech stocks such as Resonac Holdings and SUMCO Corp. posted impressive gains, with Resonac Holdings up 8.57 and SUMCO Corp. up 6.6. SoftBank Group Corp. also rebounded, reflecting the broader AI rally. In Hong Kong, Innovent Biologics and Chow Tai Fook Jewellery Group stood out, up 2.1 and 3.1 respectively, as healthcare and consumer sentiment improved. Shanghai’s market saw high-turnover gains from Dahu Health Industry and Changchun Engley Automobile, both rising by 10.1, signaling ongoing momentum in healthcare and automotive sectors. These dynamics suggest traders are focusing on short-term tactical opportunities in high-growth and high-turnover names.

Economic News

Recent economic data has played a pivotal role in shaping risk appetite. In Japan, the Bank of Japan increased its key policy rate to 0.75, the highest since 1995, reflecting policy normalization and confidence in domestic resilience. However, November Manufacturing PMI contracted to 48.7, indicating ongoing industrial headwinds. In China, weak retail sales and factory output data were offset by investor optimism regarding potential government stimulus. Hong Kong’s retail sales growth of 5.3 and industrial production increase of 5.4 have provided a lift to consumer and industrial sectors, reinforcing the region’s cautious optimism.

Economic Events

Attention is firmly on central bank actions and high-level meetings. The Bank of Japan’s recent rate hike has introduced volatility in currency markets and is expected to influence cross-border capital flows. In China, markets are closely monitoring upcoming PMI releases and potential stimulus announcements, which could serve as key inflection points for risk assets. No major economic events are scheduled in Hong Kong for today, but further government policy support remains a watchpoint for market participants.

Market Sentiment

Overall sentiment across Asian markets is cautiously optimistic, with a bias towards selective risk-taking in high-growth sectors. The Nikkei 225’s advance suggests renewed confidence post-policy normalization, though global tech volatility and macro uncertainty continue to temper aggressive positioning. The Hang Seng Index benefits from targeted buying in technology and healthcare, supported by government signals and hopes for additional stimulus. The Shanghai Composite reflects a neutral-to-bullish tone, driven by policy support expectations and strong IPO activity, though persistent manufacturing weakness restrains wider enthusiasm. Investors are favoring a blend of defensive strategies and tactical sector rotation, closely tracking central bank guidance and macroeconomic data for further direction.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.