Asia Markets Tick Up on Tech Strength Despite Rate Uncertainty

GLOBAL MOOD: Mild Risk-On
Drivers: Fed rate-cut bets, Japan rate-hike expectations, US–Russia peace talks,

Asia traded with a mild risk-on tone as a tech rebound on Wall Street and a cryptocurrency recovery lifted sentiment, even as investors weighed renewed rate uncertainty from the Fed and BOJ. Equity gains remained measured amid lingering volatility across digital assets.

TODAY’S WATCHLIST
 - RBI MPC 3-day Policy Meeting Begins
 - ECB President Lagarde Speech

THE BIG STORY
Diplomatic efforts to end the Ukraine war hit a major setback after a five-hour meeting in Moscow between Russian President Vladimir Putin and US envoys Steve Witkoff and Jared Kushner ended without progress. Kremlin aide Yuri Ushakov said that “compromises have not yet been found,” underscoring the widening gaps despite President Trump’s repeated insistence that resolving Europe’s deadliest conflict since WWII is a top priority. The stalemate comes as Ukraine pushes back against pressure to accept terms seen as favouring Moscow.

Separately, the US administration is preparing to expand its travel ban to around 30 additional countries, intensifying efforts to curb migration following last week’s fatal attack on National Guard members in Washington. Officials say a list of affected countries will be released soon, marking one of the most significant tightening steps since the original ban. Trump said further actions are under consideration as investigators continue probing the suspect’s background.

Data Spotlight
Economic sentiment in the US improved notably in December, with the RealClearMarkets/TIPP Economic Optimism Index rising 9.1% to 47.9, up from November’s 17-month low of 43.9 and beating expectations of 44.1. Although the index remained below the neutral 50 mark for the fourth month, the rebound reflects stabilising confidence following the resolution of the government shutdown. Sub-indices showed broad improvement: the Six-Month Economic Outlook rose 11% to 44.4, the Personal Financial Outlook climbed 6.7% to 54.0, and Confidence in Federal Economic Policies increased 10.5% to 45.4.

Separately, US crude oil inventories fell by 2.48 million barrels in the week ending 28 November, marking a second consecutive weekly decline and signalling modest tightening in near-term supply.

Takeaway: Economic sentiment is improving but remains fragile, while consecutive inventory draws hint at early stabilisation in US crude balances.

WHAT HAPPENED OVERNIGHT

• US stocks rebound as risk appetite improves
  • US stocks bounced back on Tuesday, with the S&P 500 +0.3%, Nasdaq +0.9%, and Dow +200 pts, reversing part of Monday’s sharp selloff.
  • Bitcoin’s rebound lifted overall risk sentiment, boosting flows back into equities.
  • AI & software names steadied: Nvidia +0.9%, Palantir +1.9%, though Broadcom –1.2% on profit taking.
  • Big movers led the recovery: Boeing +10.2%, Intel +8.7%, AppLovin +4.7%, helping offset weakness in mega-cap tech.

• US Treasury yields rise on global rate jitters
  • The 10-year US Treasury yield climbed above 4.1% on Tuesday, extending Monday’s jump as global rate expectations turned more hawkish.
  • BOJ rate-hike signals rattled global bonds, lifting yields worldwide and pressuring US Treasuries.
  • Improved domestic risk sentiment also reduced safe-haven demand, pushing yields higher.

• US Dollar ahead of key Fed decision
  • The Dollar index held near 99.4 on Tuesday, stabilising after Monday’s two-week low, as markets maintained strong expectations of a 25 bps Fed rate cut next week.
  • The dollar rebounded against the yen, retracing Monday’s losses, even as markets continued to price the risk of a December BOJ rate hike.
  • Late in the session, the greenback softened after President Trump hinted that a potential Fed Chair candidate was present while introducing White House adviser Kevin Hassett, adding uncertainty to the Fed leadership narrative.

• Crude oil prices slips as peace hopes fade, supply worries rise
  • Brent crude prices fell over 1% on Tuesday as traders weighed fading optimism over Russia-Ukraine peace talks against persistent oversupply concerns.
  • Brent crude closed down 1.14% at $62.45, while WTI slid 1.15% to $58.64. 

Day’s Ledger

Economic Data

• US API Crude Oil Stock Change
• India Composite, Services PMI Data
• Euro Composite, Services PMI Data
• Euro PPI Data
• US Industrial Production 
• US Composite, Services PMI Data

 Corporate Actions

• Hilton Metal board to mull fund raising
• Nectar Life board to mull share buyback
• Best Agro board to mull stock split, bonus share issue
• Autoline Ind board to mull fund raising

 Policy Events

• RBI MPC 3-day Policy Meeting Begins
• ECB President Lagarde Speech

 Tickers to Watch

• HUDCO eyes end-to-end role for ULBs to drive Urban Challenge Fund
• MARUTI has established 2K exclusive charging points across 1,100 cities: MD
• US portfolio, margin expansion to drive gains for pharma major LUPIN
• Centre appoints LIC CFO Ramakrishnan Chander as managing director
• RBI retains SBI, HDFC Bank and ICICI Bank as systemically important banks
• Jio-FB deal: SC rejects RIL's plea against SAT order imposing ₹3 million fine
• ADANI ENTERPRISES completes ₹2.31 billion acquisition of Trade Castle Tech Park

 Must Read

• Putin’s Visit: A Diplomatic Tightrope For New Delhi
  
• Bharti Airtel Realises Jio Was Right on Wireless Home Broadband in India
  
• Malhotra’s Straight Ball and the Shot Market Played
  
• A Rate Cut Now Could Strengthen India’s Growth Cushion
  
• Deregulation in an Age of Imperial Ambition
  
• Europe's green push cuts emissions, but can its economy bear the cost now?
  
• Russia expects India's reduced oil imports to recover soon despite US curbs
  
• India's crude security holds as refiners pivot from sanctioned suppliers
  
• Parl panel asks govt to conduct long-term field trials on nano-fertilisers
  
• Growth to Slow as Tariffs Bite, But AI Investments May Cushion the Blow
  
• Eurozone Inflation Picks Up as Services Prices Accelerate

 

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See you tomorrow with another edition of The Morning Edge.

Have a great trading day

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