Asian equities presented a fragmented performance on Friday during subdued holiday trading, with technology shares experiencing declines as the recent rally fueled by Federal Reserve rate cut expectations began to lose momentum. While artificial intelligence developments continue influencing global market fluctuations, investor attention remains firmly fixed on U.S. monetary policy directions. Recent commentary from Federal Reserve officials has revitalized hopes for potential central bank action during its upcoming December meeting.
Stephen Innes of SPI Asset Management captured the prevailing market sentiment, noting, ‘Market participants are unanimously converging toward the same conclusion: the Fed will deliver holiday cheer through policy adjustments.’
Japan’s Nikkei 225 remained virtually unchanged at 50,172.60, with AI-associated stocks including Kioxia Holdings, Fujikura and Lasertec among the notable decliners. Fresh government data revealed Tokyo’s core inflation held steady at 2.8% year-on-year in November, maintaining October’s level and remaining above the Bank of Japan’s 2% target. This sustained inflationary pressure reinforces expectations for the central bank’s gradual shift toward higher interest rates, though analysts anticipate no immediate hike during December’s meeting.
South Korea’s Kospi experienced a significant 1.4% decline to 3,930.95 following disappointing economic indicators. Industrial production dropped 4% month-on-month in October, substantially worse than September’s 1.1% contraction. Semiconductor production plummeted 26.5% monthly, dragging down technology giants including LG Energy Solutions, SK Hynix and Samsung Electronics.
Chinese markets showed modest movements with Hong Kong’s Hang Seng index dipping 0.2% to 25,896.33 while the Shanghai Composite index gained 0.2% to 3,883.46. Regional performances varied with Australia’s S&P/ASX 200 index declining 0.1% to 8,608.90, Taiwan’s Taiex advancing 0.9%, and India’s BSE Sensex edging up 0.1%.
The trading session followed positive momentum in U.S. markets, where stocks closed broadly higher on Wednesday before the Thanksgiving holiday. The S&P 500 and Dow Jones both gained 0.7%, while the Nasdaq Composite added 0.8%.
In commodity markets, U.S. benchmark crude oil increased 43 cents to $59.08 per barrel, while Brent crude, the international standard, rose 21 cents to $63.08 per barrel in early Friday trading. Currency movements saw the U.S. dollar strengthen slightly to 156.34 Japanese yen from 156.31 yen, while the euro weakened to $1.1584 from $1.1596.