Asian shares mixed ahead of Lunar New Year holidays and gold prices fall

Asian Markets Show Mixed Performance as Lunar New Year Approaches

Asian stock markets displayed varied performance on Monday, with several exchanges closed or operating reduced hours ahead of Lunar New Year celebrations. The traditional holiday, which begins Tuesday, significantly thinned trading volumes across the region.

Japan’s Nikkei 225 declined 0.2% to 56,806.41 following disappointing economic data. Government reports showed Japan’s economy grew at an annualized rate of just 0.2% in the October-December quarter, falling below economists’ expectations. This sluggish growth increases the likelihood that Prime Minister Sanae Takaichi will move forward with plans to stimulate the economy through increased government spending and tax cuts.

“The weak growth figures provide additional justification for Takaichi’s economic revival strategy,” noted Marcel Thieliant, head of Asia Pacific at Capital Economics. “We can expect more aggressive fiscal measures in the coming months as Japan grapples with its economic challenges.”

Hong Kong’s Hang Seng Index bucked the downward trend, rising 0.5% to close at 26,705.94 in a shortened trading session. Meanwhile, markets in mainland China, South Korea, and Taiwan remained closed for the holiday.

In Australia, the S&P/ASX 200 edged up 0.2% to 8,940.60, while India’s Sensex advanced 0.3%, reflecting modest optimism in these markets despite the holiday-thinned trading environment.

U.S. futures showed slight gains, with both S&P 500 and Dow Jones Industrial Average futures up 0.2%. American markets are closed Monday for Presidents Day, creating a natural pause after Friday’s session, which saw stocks stabilize following a sharp decline earlier in the week.

The previous trading day had witnessed considerable volatility, particularly in technology stocks, as investors wrestled with concerns about artificial intelligence disruptions across various industries. Software companies were especially hard hit by these worries.

However, a report indicating cooled inflation in January helped calm market nerves. The data suggested U.S. price pressures may be easing, potentially giving the Federal Reserve more latitude for another interest rate cut in the coming months – a prospect that typically supports equity markets.

The S&P 500 finished Friday’s session with a marginal gain of less than 0.1%, settling at 6,836.17. The Dow Jones Industrial Average added 0.1% to reach 49,500.93, while the tech-heavy Nasdaq composite slipped 0.2% to 22,546.67.

Nvidia, the chipmaker that has become the heaviest-weighted company in the S&P 500 amid the AI boom, fell 2.2% on Friday. In contrast, technology company AppLovin rebounded with a 6.4% gain after losing nearly a fifth of its value the previous day, as investor sentiment regarding AI’s impact on software businesses fluctuated.

In commodities markets, precious metals retreated from recent highs. Gold declined 0.6% to $5,015.40 per ounce, while silver experienced a sharper drop of 1.9%, falling to $76.50 an ounce. Despite the pullback, gold remains near historic highs as investors continue to view it as a haven amid economic uncertainty.

Oil prices held steady, with U.S. benchmark crude oil gaining just 1 cent to $62.90 per barrel. Brent crude, the international standard, edged up 2 cents to $67.77 per barrel. The stability in oil prices comes despite ongoing concerns about global demand and geopolitical tensions in the Middle East.

In currency markets, the U.S. dollar strengthened against the Japanese yen, trading at 153.19 yen compared to 152.64 yen previously. The euro weakened slightly against the dollar, changing hands at $1.1864, down from $1.1872.