Asian Stock Market Summary

Most Asian stocks rose on Thursday, tracking a record-high close on Wall Street due to a tech share rally, while South Korean equities fell amid political concerns.

All three major U.S. stock indexes ended at record highs overnight, bolstered by strong earnings from Salesforce (NYSE:CRM). U.S. futures showed little change on Thursday. Investors found some reassurance from U.S. Federal Reserve Chair Jerome Powell’s remarks at a New York Times event, where he highlighted the strong U.S. economy and maintained expectations for a December rate cut, though he cautioned on future easing.

South Korean Shares Extend Losses After Martial Law Fiasco

South Korea's KOSPI index decreased by 0.3%, following a 1.3% drop the previous day after President Yoon Suk-Yeol attempted to impose martial law. Yoon declared martial law on Tuesday to address “anti-state forces” among political opponents but revोकed the measure within hours after facing backlash, including parliamentary rejection and public protests, leading to calls for his impeachment.

In response, South Korea's Finance Ministry announced a 40 trillion won ($28.35 billion) market stabilization fund after the martial law declaration disrupted markets. The Bank of Korea may buy bonds and expand repo operations, ready to act under contingency plans if necessary. South Korea's economy grew only 0.1% in the third quarter, unchanged from earlier estimates. The KOSPI has dropped nearly 7% this year, with the won declining about 9% against the U.S. dollar.

Asia Stocks Drift Higher, But Sentiment Cautious

Japan's Nikkei 225 rose 0.7%, and TOPIX was up 0.2%. Data indicated Japan's service activity returned to growth in November due to improved demand. Australia's S&P/ASX 200 gained 0.4% after data showed a rebound in the trade balance in October, particularly boosted by demand from China.

China's Shanghai Composite index saw slight gains, while the Shanghai Shenzhen CSI 300 index was largely unchanged. Morgan Stanley noted that foreign investment in Chinese equities ended a brief two-month period of net inflows due to concerns over increasing U.S. trade tariffs. Meanwhile, India's Nifty 50 Futures pointed to a positive opening ahead of the Reserve Bank of India's interest rate decision on Friday. However, Hong Kong's Hang Seng index dropped over 1%, under pressure from Alibaba (NYSE:BABA) (HK:9988) shares falling over 2% and BYD Co (HK:1211) sliding about 3% amid new U.S.-China export curbs.

Elsewhere, the Philippines' PSEi Composite index dipped by 0.2%, and Indonesia's Jakarta Stock Exchange Composite Index fell by 0.3%. Investors are apprehensive as Asia faces growing geopolitical risks, particularly under the incoming Trump administration. This week, attention remains on key U.S. nonfarm payroll data for further clarity on the Fed's interest rate outlook.