Europe hits records as Asia edges higher
European markets rose after a subdued session in Asia, with investors counting bumper gains heading into year-end. The pan-European STOXX 600 index climbed to a new peak.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent and was on track for an annual gain of 26.7 per cent, its best performance since 2017. Japan’s Nikkei eased 0.1 per cent on the day but was up 26 per cent for 2025.
US stock futures were flat to slightly lower, pointing to a cautious start later in the day.
Wall Street pulls back but ends year near highs
Overnight, Wall Street finished lower as heavyweight technology stocks retreated from last week’s gains.
Even so, US shares remain on course to end 2025 near record levels, after posting double-digit gains in a volatile year shaped by tariff disputes, central bank policy shifts and ongoing geopolitical tensions.
Precious metals stabilise after sharp sell-off
Silver and gold found some footing after a sharp pullback from record highs took some momentum out of the precious metals rally.
Thin holiday trading conditions amplified price swings. After hitting a record of about US$84 an ounce, silver slumped 8.7 per cent — its biggest one-day fall since August 2020 — dragging gold and copper lower with it.
Silver rebounded 2.5 per cent on Tuesday to US$74.10 an ounce and remained on track for an annual gain of 156 per cent. Gold rose 0.7 per cent to US$4,361 an ounce after falling 4.4 per cent overnight.
IG analyst Tony Sycamore said the initial surge in silver was likely driven by stop losses, price action and panic buying, as well as the Chicago Mercantile Exchange raising margin requirements.
The rally soon ran out of steam, however, with little follow-through buying at elevated levels.
Geopolitical tensions keep oil supported
Oil prices held on to gains made overnight, as geopolitical risks remained in focus.
Brent crude futures were flat at US$61.92 a barrel after jumping 2.1 per cent on Monday, while US West Texas Intermediate crude slipped 0.1 per cent to US$58.01 a barrel.
Russia accused Ukraine of attacking President Vladimir Putin’s residence, though Moscow provided no evidence. The claim added uncertainty around US-led efforts to broker peace.
Further adding to tensions, President Donald Trump said he could support another major strike on Iran, while China carried out 10 hours of live-fire military exercises around Taiwan.
Currencies and bonds reflect rate expectations
In currency markets, the US dollar was steady ahead of the release of minutes from the Federal Reserve’s December meeting, which are expected to show divisions within the central bank over policy direction in 2026.
The dollar index was on track for an annual decline of nearly 10 per cent, its steepest fall in eight years.
The yen hovered at 155.85 per dollar, well below the 158–160 range that could prompt intervention from Japanese authorities. The euro traded at US$1.1775 and was on course for a gain of 13.7 per cent this year.
Expectations of US rate cuts have weighed on the dollar and supported bond markets. Two-year Treasury yields slipped one basis point to 3.4586 per cent, extending a four-session decline and bringing the year’s fall to nearly 80 basis points. Ten-year yields were set for an annual drop of 46 basis points.
