Stocks up as markets wind down to bumper year
Asian stocks rose on Wednesday, capping a year of buoyant AI-driven gains; Commodities such as gold and silver continued their upward trend to all-time highs towards the end of 2025.
Overnight on Wall Street, the S&P 500 posted a record close as the elusive Santa Claus rally began. US data showing that the economy grew much faster than expected in the third quarter increased risk sentiment, but put pressure on bonds.
Gold and silver were again the largest carriers in early Asian trade. Spot gold prices rose 0.8 per cent to an all-time high of US$4,524 ($6,760) per ounce, taking this year’s gain to 72 per cent. Silver rose 1.2 per cent to a record US$72.27 ($A107.99) an ounce, with an annual gain of almost 150 per cent expected in its best year yet.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, while stocks in the region rose slightly. The index increased by 26 percent this year, its best performance since 2017.
EURO STOXX 50 futures, Nasdaq futures and S&P 500 futures were little changed due to weak liquidity.
Japan’s Nikkei index increased by 0.4 percent and 26 percent this year. South Korea outperformed the rest of Asia, with a very rapid increase of 72 percent over the year.
“As equity markets enter the fourth year of the bull market, our fundamental market call remains constructive,” said Scott Chronert, U.S. equity strategist at Citi, who predicts another year of upside for stocks due to earnings growth and higher valuations.
“However, high performance dispersion within themes, sectors and market cap is expected.”
In the foreign exchange market, the yen gained value for the third consecutive session due to the risk of intervention by Japanese authorities. The dollar retreated from the level of 158, which was subject to interventions in the past, and fell to 155.78 yen, losing 0.3 percent.
The euro has remained largely stable at US$1.18 ($A1.76), gaining 14 per cent this year. The dollar has lost nearly 10 percent of its value against its major peers this year.
Treasury bonds have rebounded this year as the Fed continues to cut interest rates. While two-year Treasury bond yields decreased by 72 basis points this year and remained stable at 3.532 percent, 10-year treasury yields decreased by 42 basis points on a yearly basis and traded at 4.1589 percent.
Oil prices remained stable in early trading but are expected to experience losses for the third consecutive year. Brent crude futures remained steady at US$62.41 ($A93.25) per barrel but are down 16 per cent for the year.
