(Sharecast News) - Asia-Pacific markets mostly advanced on Monday, with equities rising across China, Hong Kong and Australia, while South Korea's benchmark Kospi closed at a fresh record.
Trading conditions were thinner in the region as Japan's markets were closed for the Coming of Age Day holiday, while investors also monitored developments in the Middle East and moves in oil prices.
Broader sentiment was shaped by turbulence in US markets, with Patrick Munnelly, market strategy partner at TickMill, noting that "US stock futures took a hit, and the dollar tumbled as concerns over the Federal Reserve's independence surfaced," after Federal Reserve chair Jerome Powell revealed that the central bank had received grand jury subpoenas from the US Justice Department.
Markets in the green across Asia
In South Korea, the Kospi gained 0.84% to finish at an all-time high of 4,624.79.
Kumho Electric surged 29.86%, Hyundai Engineering & Construction climbed 20.18%, and Sungmoon Electronics advanced 16.05%.
The rally came as regional risk appetite held firm despite heightened geopolitical uncertainty, including reports that Donald Trump was weighing options for possible US intervention in Iran, where protests entered a third week.
Munnelly said oil markets had already reacted sharply to the unrest, with "oil prices experienc[ing] their largest two-day rally since October, fuelled by escalating protests in Iran that raised concerns about potential disruptions to supply from OPEC's fourth-largest producer."
Mainland Chinese markets also posted solid gains.
The Shanghai Composite rose 1.09% to 4,165.29, with Xi'an Bright Laser Tech jumping 20%, Beijing Piesat Information Technology up 17.11%, and Western Superconducting Tech higher by 14.37%.
The Shenzhen Component added 1.75% to 14,366.91, supported by strength in technology and industrial names.
Attention was turning to upcoming data, with Munnelly noting that "China's trade data [on Wednesday] will reveal the full impact of US tariffs for 2025," even as he cautioned that political developments could yet overshadow scheduled releases.
Hong Kong shares extended their advance, with the Hang Seng Index climbing 1.44% to 26,608.48.
Alibaba Health Information Technology surged 10.23%, Kuaishou Technology rose 7.43%, and Meituan gained 6.6%, as investors continued to rotate into large-cap growth stocks amid a softer US dollar and firm demand for risk assets.
Sydney joins rally, Wellington in the red
Australian equities edged higher, with the S&P/ASX 200 up 0.48% at 8,759.40.
Light & Wonder jumped 17.97%, Ramelius Resources added 6.3%, and Newmont Corporation rose 5.84%.
Economic data also supported sentiment, with household spending rising 1.0% in November, following increases of 1.4% in October and 0.4% in September.
Spending was now 6.3% higher than a year earlier, driven by a 1.2% rise in services spending linked to major events and a 0.9% increase in goods spending supported by Black Friday sales.
By contrast, New Zealand stocks dipped, with the S&P/NZX 50 slipping 0.1% to 13,683.29.
Eroad fell 2.43%, Goodman Property Trust declined 1.98%, and Meridian Energy eased 1.94%.
Dollar retreats, oil prices come off highs
In currency markets, the dollar was little changed against the yen, last trading down 0.03% at JPY 157.84, while it weakened against its Australian and New Zealand counterparts, falling 0.37% against the former to AUD 1.49 and retreating 0.4% from the latter to change hands at NZD 1.7376.
Munnelly said the greenback had come under pressure more broadly, noting that "the dollar tumbled as concerns over the Federal Reserve's independence surfaced," while safe-haven demand lifted other currencies.
Oil prices edged lower in Asian trading as traders weighed geopolitical risks after last week's sharp gains, with Brent crude futures last down 0.35% on ICE at $63.12 per barrel, and the NYMEX quote for West Texas Intermediate off 0.44% at $58.86.
Prices remained in focus as unrest in Iran had reportedly left more than 500 people dead, according to a US-based rights group, adding a layer of uncertainty to global markets.
Munnelly said Brent had "surpassed $63 per barrel after surging nearly 6% over Thursday and Friday," adding that president Trump had confirmed the US was "closely monitoring the situation in Iran and weighing possible responses."
Reporting by Josh White for Sharecast.com.
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