Asian equities climbed on Monday as investors bet on a final-year rally, with the ASX200 rising 1.8% and the Hang Seng Index gaining 2.3%. The SSEC and NKY also posted solid advances, driven by optimism around portfolio rebalancing and seasonal capital inflows.
- ASX200 up 1.8%, HSI up 2.3%, NKY up 1.5%, SSEC up 1.2% on year-end rally expectations
- EEM ETF gained 1.6% on regional equity inflows
- Technology and financial sectors led market gains across Asia
- Portfolio rebalancing and seasonal capital flows cited as primary drivers
- Electric vehicle and semiconductor stocks delivered double-digit gains
- Futures suggest continued positive momentum into next trading session
Major Asian indices opened higher on Monday, buoyed by expectations of a year-end market rally fueled by institutional rebalancing and seasonal investment flows. The ASX200 led gains with a 1.8% increase, while the Hang Seng Index advanced 2.3%, marking its strongest daily performance in over two weeks. The Nikkei 225 rose 1.5%, and the Shanghai Composite climbed 1.2%, supported by strong gains in financials and technology sectors. Market participants are anticipating heightened activity in the final trading days of 2025, as global fund managers adjust portfolios ahead of the fiscal year-end. This seasonal pattern has historically led to increased buying in equities, particularly in emerging and developed Asian markets. The EEM ETF, tracking broad emerging market equities, rose 1.6%, reflecting inflows into regional growth assets. The rally was broad-based, with consumer discretionary and tech stocks driving momentum. Japanese semiconductor exporters and Chinese electric vehicle manufacturers posted double-digit percentage gains, contributing significantly to the NKY and SSEC’s moves. Financials also performed strongly, with several Hong Kong and Australian banks reporting better-than-expected quarterly results, reinforcing investor confidence. The upward momentum extended into early trading, with futures on the SSEC indicating a positive open for mainland markets. Analysts note that while volatility remains elevated due to geopolitical headwinds, the year-end rally trend has historically proven resilient across multiple cycles.