Asian stocks surged in thin holiday trading on Friday after ending 2025 on a subdued note. Regional trading volumes remained light 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 Federal Reserve Chair Jerome Powell's term ends in May and President Donald Trump already said he wants to see interest rates go down to 1 percent.
U.S. economic data due next week, including the U.S. payrolls report, 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 2.8 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 surged 2.3 percent to 4,309.63 after data showed South Korean 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 spiking 7.2 percent and SK Hynix jumping 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 Index rose 0.2 percent to 8,727.80, led by gains in energy and healthcare stocks. The broader All Ordinaries Index settled 0.2percent 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 growth in Australia's manufacturing activity slowed in December.
U.S. and European markets were closed on Thursday for the New Year's Day 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 news, data showed new claims for unemployment benefits fell in holiday week but stayed near a months-long range.
The major U.S. indexes notched big annual gains after a roller-coaster year dominated by President Trump's tariff uncertainties and 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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Business News
December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.