Asian Markets Edge Up as US Data Supports Cautious Risk Appetite

GLOBAL MOOD: Risk-On
Drivers: Ukraine peace diplomacy, Nigeria Geopolitical Tension

Markets remain in a mild risk-on mode as Asia follows Wall Street’s fresh record highs, supported by steady US labour data and easing yield pressures. Thin holiday trading has tempered conviction, while geopolitical headlines add background noise without derailing sentiment. The dollar remains soft and oil prices subdued on oversupply concerns.

THE BIG STORY
The United States carried out an airstrike against Islamic State militants in northwest Nigeria at the request of the Nigerian government, marking a rare direct US military intervention in West Africa. President Donald Trump said the strike targeted ISIS fighters who were “viciously killing” Christian communities, while US Africa Command confirmed multiple militants were killed in Sokoto state. The action follows weeks of heightened rhetoric from Trump, who has warned that Christianity faces an “existential threat” in Nigeria and signalled a willingness to intervene militarily if violence persists.

Separately, diplomatic efforts to end the Russia–Ukraine war continue to inch forward. Ukrainian President Volodymyr Zelenskiy said he held an hour-long conversation with Trump’s special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner, describing the talks as constructive and focused on timelines, formats, and new ideas for advancing peace. While no breakthrough has been announced, the engagement underscores Washington’s renewed push to broker a deal after nearly four years of conflict.

Data Spotlight 
US Initial jobless claims fell by 10,000 to 214,000 in the week ended December 20, coming in well below expectations of 223,000 despite the typically volatile holiday period. This marked the lowest reading since January, excluding Thanksgiving-related dip. Claims filed by federal employees also declined to 805, the lowest in three weeks, easing concerns linked to disruptions from the recent government shutdown.

Meanwhile, continuing claims rose for a second week to 1.92 million, reinforcing the picture of a labour market characterised by low hiring and low firing, rather than renewed strength or sharp deterioration.

Takeaway:
The data point to a stable but cooling labour market, with layoffs remaining contained. Rising continuing claims suggest slower re-employment, supporting expectations of gradual Fed easing ahead.

WHAT HAPPENED OVERNIGHT

• US stocks climbed Wednesday amid optimism for the economy and earnings through 2026
  • US stock markets were closed on Thursday for Christmas.
  • On Wednesday, S&P 500 and Dow Jones rose to record highs.

• US Treasury yields ease ahead of holiday
  • US Treasury markets were shut on Thursday for the Christmas holiday.
  • Treasury yields declined after jobless claims data signalled easing labour market pressures.
  • The benchmark US 10-year yield fell 3.4 bps to 4.136%, down from 4.169% late on Tuesday.

• US Dollar stays subdued, eyes worst year since 2017
  • US markets were shut on Thursday for the Christmas holiday.
  • On Wednesday, the dollar traded in a narrow range as investors avoided fresh positions.
  • The dollar index edged up 0.1% to 98.00, holding near recent lows.

• Crude oil prices ease, set for steepest annual drop since 2020
  • Brent crude slipped 0.2% to $62.24/barrel, while WTI edged down 0.05% to $58.29/barrel on Wednesday.
  • Crude is on track for its sharpest yearly decline since 2020, reflecting persistent oversupply concerns.
  • Risks of supply disruptions from Venezuela and Russia offered some support, preventing sharper losses. 

Day’s Ledger

Economic Data

• Japan Unemployment data
• India Credit-Deposit Data
• India FX Reserves  

Corporate Actions

• Anupam Finserv board to consider fund raising 
• Ashiana Inspat to consider quarterly earnings 
• Bazel Intl to consider bonus share issue
• Prabha Energy board to consider fund raising 

TICKERS TO WATCH

• Adani Group seals ₹800 billion in deals since 2023 short-seller crisis
• Zepto to approach Sebi with confidential DRHP, plans 2026 listing
• Ola Electric secures ₹3.67 billion incentive under India's auto PLI scheme
• Sun Pharma unit recalls 17,000-plus bottles of antifungal shampoo in US
• Domain-led growth key as AI blurs line between engineering, IT: Tata Tech
• Evaluating setting up shop in United States: Vikram Solar chairman
• Margins, valuation hurdles for Eicher Motors despite strong volume gains 

MUST READ

• Risk of AI disruption to white-collar jobs lower in India: IT Secretary
• Labour reforms get a boost, rules on four codes in the offing in 2026
• Carbon tax, critical minerals to figure in India-EU trade talks early next year
• India's energy jobs boom exposes the myth of AI-led job destruction
• High costs, complex R&D hindering electric motorcycles: NITI Aayog
• CII lays out fiscal strategy to bolster macro stability ahead of budget
• I-T dept flags inaccuracies in returns, allows revised returns up to Dec 31
• Only one-fourth of MSME drugmakers likely to meet GMP norms by deadline 

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See you tomorrow with another edition of The Morning Edge.

Have a great trading day

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