Asian equities gain to extend record global rally

Asian shares edged up during Tuesday's open, extending the record-breaking run for global stocks as investors looked past geopolitical concerns.

The MSCI Asia Pacific Index extended its gains for the fourth day, led by a 1% gain for the Nikkei 225 Index. Stocks traded lower in South Korea and Australia. Meanwhile, equity-index futures were looking at gains for China after stocks rallied on Wall Street, with megacaps like Tesla and Amazon among the winners.

Gold and silver gave up some of the gains that came after the US capture of Venezuela’s President Nicolas Maduro. Treasuries steadied after the 10-year yield fell three basis points on Monday, when a report showed US manufacturing activity shrank in December by the most since 2024. That supported the case for more easing by the Federal Reserve.

For stocks, the main themes, in the US especially, will be stronger earnings growth and broadening leadership, while AI financing and a revival of M&A will take center stage in credit markets. The analysts are overweight on global equities.

“Macro concerns still matter, but micro will become a larger driver of asset returns in this cyclical recovery,” they said.

The bullish attitude showed up in equity derivatives as well.

A “mix of momentum chasing and rebound plays reflects a more constructive tone than most of 2025, with sentiment and positioning turning decisively less bearish,” said derivatives strategist Chris Murphy of Susquehanna International Group, in a note Monday. “That optimism is showing up clearly in options activity, where upside structures dominate and consistent with a market increasingly positioned for strength rather than defense.”

Markets closely followed the developments in Venezuela, with Brent crude rising 1.7% to $61.76 a barrel. Chevron Corp. shares traded higher, alongside other US oil majors, after President Donald Trump floated plans for a US-led revival of Venezuela’s industry.

Venezuela’s deeply discounted bonds traded higher after the capture of Maduro set the stage for the potential regime change that investors have been betting on.

Defaulted notes from the sovereign and state-run oil company PDVSA have already more than doubled to between 23 and 33 cents on the dollar in the past few months as Trump ramped up pressure.

Key US economic data will likely shape the week ahead. In addition to the December jobs report, the Bureau of Labor Statistics will issue figures on Wednesday for November job openings, quits and layoffs. The Fed lowered its target band for short-term lending rates at its past three meetings in response to weakening labor-market conditions, and officials are expected to reduce it further this year.

Later in the week, the US government will report on housing starts, while the University of Michigan issues its preliminary January consumer sentiment index.

“Even as geopolitics are once again top of mind for investors, we’re reminded that this week offers an array of key fundamental updates,” wrote Ian Lyngen at BMO Capital Markets. That’s “still the most relevant wild card for the US economy and monetary policy.”

With inputs from Bloomberg

Also Read: Trade Setup for January 6: HDFC Bank concerns to keep a lid on Nifty upside on weekly expiry?