Asian Shares Slip as Year-End Trading Thins, Wall Street Loses Momentum

BY COMFORT OGBONNA

Shares across much of Asia were mostly lower on Tuesday, while U.S. stock futures were little changed, reflecting cautious sentiment after a mild pullback on Wall Street. With only two trading days remaining before the year ends, market activity has been subdued as many large institutional investors have already closed their books, leaving trading volumes thin and price moves more sensitive to small shifts in sentiment.

Market participation is expected to remain limited through the rest of the week. Most global financial markets will be closed on Thursday for New Year’s Day, and several will also observe additional holidays on Wednesday and Friday, further reducing liquidity and amplifying short-term volatility.

In Japan, Tokyo’s Nikkei 225 slipped 0.4% to 50,339.48. Despite the decline, the benchmark has delivered an impressive performance this year, ending 2025 up nearly 25% as corporate reforms, a weaker yen for much of the year, and strong overseas demand for Japanese equities supported gains. Elsewhere in the region, Hong Kong stocks outperformed, with the Hang Seng index rising 1.1% to 25,914.14, supported by selective buying in large-cap shares. Mainland China’s Shanghai Composite index was virtually unchanged at 3,965.51, reflecting a cautious balance between policy optimism and concerns about the pace of economic recovery.

Australian shares edged modestly lower, with the S&P/ASX 200 slipping 0.1% to 8,717.10. South Korea’s Kospi fell 0.2% to 4,214.17, while Taiwan’s Taiex declined 0.4%. In India, the Sensex was down 0.2% as investors locked in profits after recent gains and remained wary of global cues.

On Wall Street, stocks eased on Monday in quiet trading conditions. The S&P 500 slipped 0.3%, though it remains more than 17% higher for the year and is still on track for an eighth consecutive monthly gain. The Dow Jones Industrial Average fell 0.5%, while the Nasdaq composite also declined 0.5%, weighed down by weakness in large technology stocks.

Big technology names with lofty valuations were among the heaviest drags on the market. Nvidia fell 1.2%, while Broadcom lost 0.8%, as investors continued to reassess how much future growth is already priced into companies closely tied to artificial intelligence. Tech shares have shown signs of wobbling in recent sessions as skepticism grows over whether the long-term payoff from massive AI-related investments will fully justify current spending levels and market valuations.

Energy stocks, however, found support on Monday as oil prices climbed. U.S. benchmark crude rose 2.4% to settle at $58.08 per barrel, while Brent crude, the international benchmark, gained 2.1% to end at $61.94 a barrel. Exxon Mobil shares rose 1.2% in response. Early Tuesday, oil prices edged slightly lower, with U.S. crude down 9 cents at $57.99 per barrel and Brent slipping 11 cents to $61.38 per barrel, as traders weighed near-term demand concerns against supply discipline.

Precious metals resumed their upward climb after a sharp pullback the previous day. Gold prices rose 0.9% early Tuesday after tumbling 4.6% on Monday, when the Chicago Mercantile Exchange increased margin requirements for precious metals trading, prompting some investors to reduce positions. Despite the volatility, gold remains up about 64% for the year, reflecting strong demand for safe-haven assets amid economic uncertainty. Silver prices surged 5.9% after plunging 8.7% a day earlier and have more than doubled over the course of 2025.

In the bond market, U.S. Treasury yields edged lower. The yield on the 10-year Treasury note slipped to 4.11% from 4.13% late Friday. Yields have fallen notably since the start of the year after the Federal Reserve cut its benchmark interest rate to support a slowing jobs market. While lower rates can stimulate economic activity by making borrowing cheaper, they also carry the risk of reigniting inflation, which remains stubbornly above the central bank’s 2% target and could ultimately weigh on long-term growth.

In currency markets, the U.S. dollar weakened slightly, slipping to 156.00 Japanese yen from 156.05 yen. The euro edged higher to $1.1779 from $1.1774, as traders adjusted positions ahead of the year-end break and awaited clearer signals on global monetary policy in the months ahead.