CANBERA (dpa-AFX) - Asian stocks surged in thin holiday trade on Friday after ending 2025 on a subdued note. Regional trading volumes remained thin due to holidays in Japan, China and New Zealand.
The dollar made a feeble start to 2026 after suffering its sharpest drop in eight years amid mounting economic uncertainties and rate cut expectations.
Current head Jerome Powell's term ends in May and President Donald Trump already said that he wants to see interest rates go down to 1 percent.
U.S. economic data due next week, including the U.S. payrolls report and jobless data may provide additional clues on whether the next Federal Reserve chief would opt for deeper interest-rate cuts.
Oil climbed on the first trading day of 2026 after capping its biggest annual drop since 2020. Gold jumped nearly 1.5 percent, extending upward momentum after recording its biggest jump since the 1979 oil crisis in 2025.
Hong Kong's Hang Seng index soared 2.76 percent to 26,338.47, buoyed by a strong rally in tech shares.
Seoul stocks rallied to a record high in the first trading session of 2026. The Kospi average climbed 2.27 percent to 4,309.63 after data showed South Korea's exports hit a record high in 2025, driven by a surge in AI-fueled semiconductor demand.
Tech stocks surged on retail buying, with Samsung Electronics rising 7.2 percent and SK Hynix adding 4 percent.
The South Korean won held steady around 1,440 per dollar after Bank of Korea Governor Rhee Chang-yong vowed to guard forex stability.
Australian markets edged up slightly in their first session of 2026. The benchmark S&P/ASX 200 rose 0.15 percent to 8,727.80, led by gains in energy and healthcare stocks. The broader All Ordinaries index settled 0.20 percent higher at 9,036.60.
Mining and gold stocks underperformed after Northern Star Resources cut its annual production guidance. Shares of the gold miner plummeted 8.6 percent.
The Aussie dollar held near 14-month highs ahead of monthly inflation data due next week. Earlier in the day, a survey showed activity in Australia's manufacturing activity slowed in December.
U.S. and European markets were closed on Thursday for the New Year holiday. On Wednesday, U.S. stocks ended lower for a fourth consecutive session in light New Year's Eve trading.
The Dow shed 0.6 percent, the tech-heavy Nasdaq Composite declined 0.8 percent and the S&P 500 gave up 0.7 percent as minutes from the Federal Reserve's December policy meeting revealed deep divisions among policymakers over the path of interest rates in 2026.
In economic releases, data showed new claims for unemployment benefits fell in holiday week but stayed near a monthslong range.
The major U.S. indexes notched big annual gains after a roller-coaster year dominated by President Trump's tariff uncertainties and a euphoria around AI-linked stocks.
The Nasdaq Composite skyrocketed by 20.4 percent for 2025, while the S&P 500 soared by 16.4 percent and the Dow surged by 13.0 percent.
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