Asia Market Wrap - Asian Stocks Steady
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Asian stock markets held steady on Tuesday as investors celebrated strong profits approaching the end of the year.
The region's main index rose just 0.1%, putting it on track for a 26.7% annual gain, its best performance since 2017. While Japan's market dipped slightly, it is still up 26% for the year, and markets in China and Hong Kong also saw small increases.
Meanwhile, US and European futures remained flat. South Korea continues to lead the world with a historic 75% surge this year, even though it fell by 0.8% on Tuesday.
Source: LSEG
Taiwan's stock market fell 0.6% today, ending a six-day winning streak during which it had gained about 4%. Despite this small dip, the market is expected to finish the year nearly 25% higher, marking its third consecutive year of strong growth.
Spanish Inflation Rate Slows
Spain's inflation rate slowed down for the second month in a row, dropping to a four-month low of 2.9% in December.
This was slightly higher than the 2.8% experts expected but lower than November's 3.0%. The decline was mainly caused by cheaper fuel prices and slower cost increases for entertainment activities.
However, food and drinks are getting more expensive at a faster rate than they did a year ago.
Core inflation, which leaves out unstable items like food and energy, stayed at 2.6%, matching its highest level in a year. On a month-to-month basis, overall prices in Spain rose by 0.3%.
European Session - European Shares Poised for Best Year Since 2021
European stocks held steady on Tuesday, pausing after reaching record highs yesterday. The main region-wide index rose just barely (0.08%) but remains near its all-time peak, capping off a year of strong gains.
Trading was quiet across major countries, with London rising slightly and France slipping a little.
Mining companies led the gains, rising over 1% as precious metals prices stabilized, while banks and defense stocks also moved higher. Conversely, healthcare and consumer stocks dipped slightly.
On the FX front, the US dollar held steady on Tuesday as traders waited for the latest report from the Federal Reserve. Despite this pause, the dollar is on track to lose nearly 10% of its value this year, its biggest drop in eight years due to expected interest rate cuts and worries about US politics and debt.
This weakness has helped the Chinese yuan strengthen past the key level of 7 per dollar, even though China's central bank tried to stop it.
Overall, trading remains quiet because of the holidays, but the dollar's struggles have allowed the Euro and British pound to have their best years since 2017, with the Euro gaining nearly 14% and the pound rising 8%.
Currency Power Balance
Source: OANDA Labs
Gold prices bounced back on Tuesday, rising 1% to around $4,375/oz as investors returned to the safe-haven metal.
This recovery follows a sharp drop on Monday and is being driven by renewed geopolitical fears after Russia accused Ukraine of attempting to attack President Putin's residence, a development that has damaged hopes for a peace deal.
Other precious metals also recovered from steep losses; silver climbed 3.3% to roughly $74.60, while platinum and palladium rose 3.5% and 1% respectively, regaining ground after plunging from record highs the day before.
Oil prices barely moved on Tuesday, holding steady after jumping more than 2% yesterday.
The market remains tense because Russia accused Ukraine of attacking President Putin's residence, causing investors to worry about potential supply disruptions while they wait for updates on peace talks.
As a result, Brent crude oil for February delivery slipped slightly by 6 cents to $61.88 a barrel, while the March contract dropped 4 cents to $61.45.
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Economic Calendar and Final Thoughts
The European session remains quiet following the release of the Spanish CPI data. Attention now turns to the US session where we have a host of mid-tier data releases..
With trading volume low due to the holidays, market participants are now focused on the US Federal Reserve's meeting notes due later today for clues on future economic policy. This could stoke some Dollar volatility but the response may be short-lived ahead of the New Year holiday.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Chart of the Day - FTSE 100 Index
From a technical perspective, the FTSE 100 index continues to hold near the all-time highs around the 9943 handle.
The period-14 RSI has seen a bounce of the 50 level which hints at bullish momentum still being in play.
It remains to be seen whether under the current thin liquidity environment if bulls will be able to push the Index to a fresh all-time high.
The possibility of a pullback remains in play, with support resting at 9860 before the 9800 and 100-day MA at 9762 handle comes into focus.
FTSE 100 Index Daily Chart, December 30, 2025
Source: TradingView.com (click to enlarge)
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