Asian stock markets climbed on Friday, December 12, 2025, tracking Wall Street’s push to fresh highs after the U.S. Federal Reserve delivered its third interest-rate cut of the year. But the upbeat tone came with a clear caveat: renewed volatility in big-tech and AI-linked names, after Oracle’s sharp selloff revived questions about whether massive data-center spending will translate into profits. [1]
Across the region, Japan led gains with the Topix hitting a record, while Hong Kong and mainland China rebounded on pro-growth policy signals out of Beijing. Meanwhile, industrial metals—especially copper—stole the spotlight, with Shanghai copper futures touching a record high as investors positioned for stronger Chinese demand and easier global financial conditions. [2]
Asia market snapshot: Broad gains, led by Japan and Hong Kong
Risk appetite improved through the Asia session as investors digested the Fed’s latest move and a softer U.S. dollar. A broad gauge of Asia-Pacific shares outside Japan rose close to 1% during the session, helped by strength in Japan and Australia. [3]
By late-day trade, key index moves around the region included:
- Japan: Nikkei 225 up 1.4%; the Topix also rose sharply, touching a record level. [4]
- Hong Kong: Hang Seng up 1.8%, supported by risk-on flows and China policy optimism. [5]
- Mainland China: CSI 300 up 0.6%; Shanghai Composite up 0.4%. [6]
- South Korea: Kospi up 1.4%. [7]
- Australia: ASX 200 closed up 1.23% at 8,697.3, with miners and banks leading. [8]
- Singapore: Straits Times Index (STI) up 1.5% to 4,586.45. [9]
This “up, but selective” pattern—strong cyclicals and financials, choppier tech—was one of the most consistent themes across Asia on Friday. [10]
The big global driver: Fed cuts again, but tech investors turn cautious
Asian markets took their cue from a resilient U.S. session that pushed major benchmarks to new records, supported by the Fed’s latest reduction in borrowing costs. [11]
However, tech sentiment was more fragile. Oracle shares sank about 13% after issuing weaker forecasts and signaling higher data-center spending—fueling a fresh round of debate about AI infrastructure returns and whether parts of the sector have become over-owned and over-valued. [12]
Broadcom’s results offered partial reassurance—strong numbers, but margins were a new worry—helping keep the “AI isn’t over, but expectations need to reset” narrative in play. [13]
That tension showed up in positioning: regional traders leaned into banks, metals, and other cyclicals while keeping a close eye on U.S. tech futures and the next round of guidance from mega-cap AI beneficiaries. [14]
Japan stocks: Topix record highlights “rate-hike-ready” rally
Japan was the standout. The Topix hit a record high as buying broadened beyond a narrow group of mega-cap exporters, with metals and other cyclical areas contributing to the move. [15]
One reason Japan’s rally has remained resilient into late 2025: investors increasingly see Japan as a market where inflation and wage trends finally justify normalization—without necessarily choking off growth. That’s particularly important now because traders have sharply increased bets that the Bank of Japan could raise rates as soon as next week.
According to MNI Market News’ weekly Asia-Pac macro wrap, BOJ-dated OIS pricing implied roughly a 94% probability of a 25 bp hike at the Dec. 18–19 meeting, with markets also pricing two 25 bp hikes by September 2026. [16]
Why it matters for equities:
- Banks/financials often benefit from a steeper rate outlook and improving net interest margins.
- Exporters can face headwinds if a higher-rate BOJ supports the yen.
- The broader market may see leadership rotate away from “rate-sensitive growth” and toward value/cyclicals—something already visible in Friday’s session. [17]
Greater China: Policy optimism meets old worries—property stress isn’t gone
China and Hong Kong stocks advanced as investors responded to pro-growth signals tied to Beijing’s annual economic policy discussions and readouts for 2026 priorities. Markets in the region have been highly sensitive to the “tone” of policy guidance this year, so even incremental reassurance can move prices. [18]
At the same time, official messaging didn’t deliver a single blockbuster policy surprise, and the persistent weak spot remains the property sector. Associated Press noted that China’s Central Economic Work Conference emphasized reversing a decline in investment and boosting consumption, but that no major policy shifts were reported in the initial coverage. [19]
That’s why property headlines still carry outsized influence. On Friday, Reuters reported that China Vanke proposed extending the maturity of a 4.2 billion yuan bond due Monday, underscoring ongoing stress in parts of the developer complex—even as equity indices rallied. [20]
Market takeaway: China/HK stocks can bounce on growth-friendly signals, but rallies may remain “two-speed” unless property risks stabilize more convincingly and policy follow-through looks durable. [21]
Taiwan stocks: The AI bull case is still intact—investors target 30,000 in 2026
While “AI bubble” talk rattled U.S. tech this week, one of the most bullish regional outlooks published on Dec. 12 came from Taiwan.
Reuters reported that Taiwan’s benchmark is widely seen as capable of breaching 30,000 in 2026, powered by the island’s central role in both Nvidia-style GPU supply chains and emerging alternatives (including Google’s TPU ecosystem). [22]
Several notable points from that analysis resonate with Asia market positioning right now:
- Taiwan’s market valuation was described as around 21x earnings, framed as below the Nasdaq and Nikkei—supporting the argument that the rally hasn’t become “dot-com-like” on valuation alone. [23]
- Goldman Sachs strategists were cited expecting the Taiwan index could reach 30,200 (about 7% upside) over the next 12 months, with hyperscaler capex expected to keep rising in 2026–27. [24]
- The report also highlighted a tension: foreign investors have been net sellers, even as domestic investors remain confident and local AI-linked names continue to lead. [25]
For Asia investors, Taiwan remains the cleanest “picks-and-shovels” AI trade—but it’s also the market most exposed to any sustained slowdown in AI infrastructure spending.
India stocks: Fed-driven rebound continues, with 2026 optimism building
In India, equities extended a rebound attributed in part to the Fed’s rate cut, while investors watched for domestic inflation data and monitored currency pressure.
Reuters reported that the Nifty 50 rose 0.57% to 26,046.95 and the Sensex gained 0.53% to 85,267.66, even as the benchmarks still logged a 0.5% weekly decline amid profit-taking earlier in the week. [26]
A key cross-market linkage showed up in sector leadership: metals outperformed, supported by optimism on demand as China signaled fiscal support for 2026 and as global rates eased. [27]
On the forward-looking side, Jefferies laid out a constructive 2026 thesis: a recovery in corporate earnings and steady domestic inflows. The brokerage set a 2026 year-end target of 28,300 for the Nifty 50 (around 10% upside), and also flagged the stabilizing role of ongoing domestic savings flows into equities. [28]
Australia and Singapore: Miners, gold, and banks take the baton
Australian equities participated fully in Friday’s risk-on swing, with an additional tailwind from commodities and gold miners.
The ASX 200 closed up 1.23% at 8,697.3, and sector commentary from Australian market coverage emphasized strong gains in resources and financials, while tech lagged. [29]
Gold-related momentum was especially notable. ABC reported bullion surged roughly 2% overnight to near $4,274/oz, supporting rallies in gold-linked stocks during the session. [30]
In Singapore, the STI rose 1.5% to 4,586.45, with local banks also finishing higher. The Business Times explicitly linked the regional tone to broader risk appetite while noting tech had “faced a battering” after Oracle’s earnings and capex signals. [31]
Commodities and currencies: Copper hits records as the dollar eases
Commodities were a major supporting actor for Asia equities on Dec. 12, particularly in markets with heavyweight miners and materials producers.
Reuters highlighted that Shanghai copper futures hit a record high, with markets focused on the prospect of stronger China stimulus and the broader “easier money” impulse from the Fed. [32]
Meanwhile, the U.S. dollar hovered near a two-month low (as measured by the dollar index), reinforcing risk appetite and typically helping emerging-market assets. [33]
Oil also firmed, adding to the pro-cyclical tone across global markets. [34]
What to watch next week: BoJ decision, China follow-through, and tech guidance
Friday’s Asia rally left investors with a clear checklist for what could extend—or reverse—momentum into year-end:
- Bank of Japan (Dec. 18–19): With markets pricing a high probability of a hike, the risk is asymmetric—either a surprise hold (which could weaken the yen and boost exporters) or a hike accompanied by guidance that shifts the 2026 path. [35]
- China policy details for 2026: Markets are reacting to the direction of travel, but equities may need clearer follow-through on consumption, investment support, and property stabilization to sustain a broader rally. [36]
- AI earnings and capex narrative: Oracle’s move showed how quickly sentiment can turn when the market senses “spend now, profit later” risks. Broadcom’s margin story reinforced that even “good news” can be traded critically at current valuations. [37]
- India macro and flows: Inflation, currency stability, and the durability of domestic inflows remain central for 2026 positioning—especially with Jefferies and other banks building a bullish case for next year. [38]
This article is for informational purposes only and is not investment advice.
References
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