(Sharecast News) - Asia-Pacific markets traded higher on Monday as investors assessed China's decision to keep key lending rates unchanged, while a firmer lead from Wall Street supported risk sentiment.
As Stephen Innes at SPI Asset Management noted, "Asian equity markets are stepping onto the floor with a constructive bias, taking their cue from Friday's solid rebound in US stocks and the growing belief that the final stretch of the year still belongs to the bulls."
US futures edged slightly higher in early Asian hours ahead of a holiday-shortened week, following a second straight session of gains on Friday as Oracle rallied and the artificial intelligence trade regained momentum after recent volatility.
Oracle shares rose 6.6% after TikTok agreed to sell its US operations to a new joint venture involving the software group and private equity firm Silver Lake.
Tokyo leads the region at start of Christmas week
Japanese equities led regional gains, with the Nikkei 225 jumping 1.81% to 50,402.39, supported by strong advances in materials and semiconductor-linked names.
Resonac Holdings surged 8.27%, Sumco Corporation gained 8.03% and Mitsui Kinzoku rose 7.55%.
The broader Topix added 0.74% to 3,405.17.
Innes said that while direction was clear, "some of the moves are likely to look directionally louder than they really are, given thin holiday bid to offer spread liquidity," adding that "in that kind of tape, price action can look louder than it really is, as small tickets push the market further than usual, but the direction still matters."
China stocks advance in wake of PBoC decision
Mainland Chinese markets also advanced after the People's Bank of China held its one-year and five-year loan prime rates steady at 3% and 3.5% respectively for a seventh consecutive meeting, in line with a Reuters survey.
The one-year rate influences most new and outstanding loans, while the five-year benchmark affects mortgages.
The Shanghai Composite rose 0.69% to 3,917.36, with Geo-Jade Petroleum up 10.15%, Hainan HNA Infrastructure Investment Group gaining 10.06% and Baiyin Nonferrous Group rising 10.04%.
The Shenzhen Component climbed 1.47% to 13,332.73.
Innes said the decision was widely expected, noting that "the signal there is not about what happens today, but what comes next," as a softer economy heading into the fourth quarter has increased pressure on policymakers to provide further support, with "the next rate cut likely early in the year."
Hong Kong's Hang Seng Index edged up 0.43% to 25,801.77.
SMIC advanced 5.92% and Zijin Mining Group rose 5.3%.
Pop Mart International Group gained 4.61% after the toymaker released the second edition of its biannual pop culture magazine, Playground, featuring actress Michelle Yeoh on the cover and priced at $5.70.
Labubu maker Pop Mart, valued at $33.3bn and the world's largest publicly traded toymaker by market cap, previously reported 2024 revenue of CNY 13bn and net profit of CNY 3.1bn.
The company recently said overseas revenue rose more than 365% year on year in the third quarter as it continued its international expansion, most recently launching in Doha.
South Korean shares posted strong gains, with the Kospi rising 2.12% to 4,105.93.
Keyang Electric Machinery surged 30%, while Infac climbed 17.27% and SeAH Besteel added 16.72%.
Innes said Asia was "just the next runner in the relay, taking the baton and carrying it forward while the race is still on," even as some investors trimmed exposure into year-end.
Furniture pusher leads gains in Sydney after hiking outlook
Australian equities advanced, with the S&P/ASX 200 up 0.91% at 8,699.90.
Furniture retailer Nick Scali jumped 9.88% after upgrading its first-half 2026 outlook, now forecasting revenue growth of 10% to 12% year-on-year in its Australia and New Zealand home markets, compared with prior guidance of 7% to 9%.
The company said it expected statutory net profit after tax of AUD 37m to AUD 39m, up from earlier guidance of AUD 33m to AUD 35m.
Elsewhere, DroneShield rose 7.91% after announcing a mandatory minimum shareholding policy for directors and senior managers following executive share sales that sparked investor backlash.
The company said the CEO would now need to hold shares worth 200% of salary within 12 months, while directors must reach holdings equivalent to their annual base fee within three years.
Ramelius Resources gained 7.2%.
New Zealand stocks also moved higher, with the S&P/NZX 50 climbing 1.31% to 13,508.30.
A2 Milk Company rose 3.71%, Summerset Group gained 3.29% and Ryman Healthcare added 3.15%.
Dollar weakens against regional peers as oil prices rise
In currency markets, the dollar weakened against regional peers, last trading down 0.23% on the yen at JPY 157.38, as it fell 0.42% against the Aussie to AUD 1.5062 and eased 0.48% on the Kiwi to change hands at NZD 1.7286.
Oil prices rose, with Brent crude futures last up 0.94% on ICE at $61.04 per barrel, and the NYMEX quote for West Texas Intermediate gaining 0.97% to $57.07.
Innes said commodities were "adding another layer of tension," with crude back on the radar amid geopolitical risks, particularly as "energy markets have learned to respect these pressure points when liquidity is thin and positioning is skewed bearish."
Reporting by Josh White for Sharecast.com.
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