Asian Stocks Mixed: Honda-Nissan Merger Talks Boost Sentiment

Asian markets kicked off a holiday-shortened week with a mixed performance, as investors digested the potential merger between Honda and Nissan, as well as a softer-than-expected U.S. PCE inflation reading. The Nikkei 225 in Japan climbed 1.19% to close at 39,161.34, while the broader Topix index rose 0.92% to 2,726.74. Honda Motor shares gained 3.82%, and Nissan Motor rose 1.58% amid reports that the two automakers aimed to finalize a merger agreement by June next year.



The merger discussions, which would involve creating a holding company by mid-2026, were being closely monitored, with an announcement expected later in the day. Sector peer Mitsubishi Motors also surged 5.25%. China's markets struggled, with the Shanghai Composite falling 0.5% to 3,351.26 and the Shenzhen Component losing 1.03% to 10,537.40. Notable decliners included Shanghai Lingyun Industries Development, which dropped 10.93%, and Suzhou HYC Technology, down 10.76%.



Hong Kong's Hang Seng Index rose 0.82% to 19,883.13, bolstered by a 6.21% gain in Orient Overseas International and strength in financial stocks such as Industrial and Commercial Bank of China, which rose 4.96%. South Korea's Kospi 100 advanced 1.41% to 2,431.09, with Korea Zinc leading gains at 11.2%. Other notable performers included Hanmi Semiconductor, up 8.65%, and HD Korea Shipbuilding & Offshore Engineering, which rose 8.24%.

Australia's S&P/ASX 200 outperformed, adding 1.67% to close at 8,201.60. Energy and retail stocks led gains in Sydney, with Genesis Energy rising 4.98% and Super Retail Group up 4.95%. New Zealand's S&P/NZX 50 increased 0.65% to 12,988.03, with ANZ Group Holdings surging 5.3%.

In currency markets, the dollar was last up 0.26% on the yen to trade at JPY 156.71, while it weakened 0.11% against the Aussie to AUD 1.5981, and retreated 0.08% from the Kiwi, changing hands at NZD 1.7677. Oil prices were little changed, with Brent crude futures last up 0.05% on ICE at $72.98 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.07% to $69.51.

There were no major economic data releases in the region on Monday. Markets in the U.S. will close at 1 p.m. Eastern on Tuesday for Christmas Eve and will remain closed on Wednesday for Christmas.