Asia Trades Mixed as Weak China Data Offsets Policy Support Signals

GLOBAL MOOD: Risk-Off
Drivers: US diplomatic leverage, China economic data

Asia-Pacific markets showed a cautious risk-off tone to start the final trading week, with weak China industrial profit data tempering optimism over fiscal support pledges. Geopolitical uncertainty around Ukraine peace talks, softer US equities, and falling oil prices offset gains in Bitcoin, keeping sentiment mixed and positioning light into year-end.

TODAY’S WATCHLIST
US Nov Home Sales Data
US Cushing Crude Oil Inventories

THE BIG STORY
US President Donald Trump and Ukraine President Volodymyr Zelensky offered little indication of a breakthrough on a peace deal to end the war with Russia. Speaking to reporters at Mar-a-Lago after discussions on a revised 20-point peace plan, Trump said he believed the talks were “getting a lot closer, maybe very close”. Zelensky said the plan was 90% complete, repeating the same assessment he had offered before the meeting. Trump also said he had spoken by phone with Russia President Vladimir Putin before Zelensky’s arrival and would do so again afterwards.

Still, Putin signalled limited urgency for a negotiated settlement, warning that if Ukraine does not agree to resolve the conflict peacefully, Russia would pursue its objectives by force. The remarks followed a fresh wave of air raids, highlighting the widening gap between Kyiv’s diplomatic push and Moscow’s continued military escalation, setting a tense backdrop to the meeting between Trump and Zelensky as expectations rise for clarity on the direction of US-led peace efforts.

Data Spotlight
China’s industrial profits fell sharply in November, declining 13.1% YoY, the steepest drop in over a year, accelerating from a 5.5% fall in October, according to NBS data. The deterioration came despite resilient exports, highlighting that weak domestic demand and persistent factory-gate deflation continue to weigh heavily on corporate earnings and the broader recovery. Year-to-date profits (Jan–Nov) edged up just 0.1% YoY, slowing from 1.9% growth in Jan–Oct, dragged notably by a 47.3% collapse in profits at coal mining and washing firms.

Takeaway: The data reinforces concerns that China’s recovery remains fragile and strengthens expectations for additional policy stimulus to support household demand and industrial activity.

WHAT HAPPENED OVERNIGHT

• US stocks ended flat in quiet post-Christmas trade
  • US stocks closed marginally lower on Friday in a light-volume, post-Christmas session, snapping a five-day rally.
  • All three major indices ended slightly down, though weekly gains were preserved amid a lack of fresh catalysts.
  • Nvidia rose 1.0% after agreeing to license chip technology from AI startup Groq and hire its CEO.
  • Target jumped 3.1% following reports of activist interest from hedge fund Toms Capital Investment Management.

• US Treasury yields tick higher as markets weigh Fed outlook
  • US Treasury yields around 4.15%, reversing part of Wednesday’s decline.
  • Investors continued to assess the Federal Reserve’s policy trajectory into 2026.
  • Market pricing still implies two rate cuts next year, despite resilient growth signals.
  • The initial Q3 GDP estimate showed the US economy expanded at a 4.3% annualised pace, the fastest in two years. 

• US Dollar stays under pressure near multi-month lows
  • The dollar index hovered around 97.9, holding near its lowest level since early October.
  • Expectations remain firm that the Federal Reserve will cut rates again in 2026, keeping the greenback capped.
  • Safe-haven demand for precious metals amid rising geopolitical tensions has further weighed on the dollar.

• Crude oil prices slide on oversupply concerns
  • Brent crude price fell more than 2% amid worries of a looming global supply glut.
  • Brent crude down 2.57% to $60.64 per barrel, while WTI crude down 2.76% to $56.74 per barrel.
  • Expectations of ample global supply continue to cap prices despite geopolitical risks.
    

Day’s Ledger

Economic Data

• US Nov Home Sales Data
  
• US Cushing Crude Oil Inventories

Corporate Actions

• Fusion Finance to consider fund raising
  
• Silgo Retail to consider fund raising 
  
• Simbhaoli Sugars to consider earnings 
  
• Gayatri Projects to consider earnings
  

TICKERS TO WATCH

• COFORGE acquires 100% of ENCORA for ₹170.33 billion; board approves up to $550 million QIP to repay Encora term loan.
• DIAMOND POWER INFRASTRUCTURE receives LoI from HILD PROJECTS for power cable supply worth ₹0.66 billion.
• LLOYDS ENTERPRISES raises ₹3.61 billion loans for warrant conversion in LLOYDS METALS; subsidiary to acquire remaining 12% stake in TECHNO INDUSTRIES, taking holding to 100%.
• NBCC (INDIA) reaches settlement with GNCTD to equally divide 42.46 acres of Ghitorni land, securing a perpetual lease for 21.23 acres.
• PUNJAB NATIONAL BANK reports borrowal fraud of ₹24.34 billion linked to erstwhile promoters of SREI group firms resolved under CIRP.
• SOLARWORLD ENERGY SOLUTIONS receives NTPC Renewable Energy EPC order for a 250 MWac solar project worth ₹7.25 billion.
• STYLAM INDUSTRIES reports AICA KOGYO announces open offer to acquire 26% stake for a total consideration of ₹9.91 billion.
• TIMEX GROUP INDIA promoter to sell up to 8.93% stake via OFS on December 29–30 at a floor price of ₹275 per share.
• VEDANTA declared successful bidder for the DEPO GRAPHITE–VANADIUM block, strengthening its critical minerals portfolio.
• VIKRAN ENGINEERING accepts LOAs from MP Urja Vikas Nigam for 45.75 MW AC solar PV projects in Madhya Pradesh.

MUST READ

• Import Barriers on Metallurgical Coke Are Raising the Cost of Making Steel in India
• NBFC Stability is About Models and Culture, Not Just Money
• Why One-Size Fits All Economic Policy Fails India’s Uneven Growth Reality 
• India’s Vast Creator Economy is Booming, But Inequality Defines It 
• Aravali, a defining matter & moment
• Banks urge RBI to extend trade relief measures beyond December
• IPO boom faces reality check as nearly half of 2025 listings slip below issue price
  
• BofA’s Moynihan Sees Trump’s Tariffs Starting to De-Escalate
• Trump Praises Zelenskiy After Talks That Yielded No Breakthrough
• Ukraine Says Chinese Satellites May Be Aiding Russian Attacks

 
See you tomorrow with another edition of The Morning Edge.

Have a great trading day

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