Asian markets settle mostly higher on holiday-thinned trading

Asian markets settled mostly higher in thin trade on Monday, with China, Indonesia, South Korea and Taiwan markets closing for Lunar New Year holidays. Market sentiments improved further as softer-than-expected US inflation data boosted bets that the Federal Reserve will deliver at least two interest rate cuts this year. Markets were showing signs of stabilization after a tech-led plunge last week, when traders reacted to growing concern about the hundreds of billions spent on AI infrastructure and when, if ever, they might see a return on them. However, Japan’s Nikkei fell after Japan reported its economy grew a miserly 0.2% annualised in the December quarter, far below the 1.6% gain forecast as government spending dragged on activity. Meanwhile, investors were closely watching upcoming macro cues, including the FOMC meeting minutes, the US GDP advance estimate, and PCE inflation data, for clearer signals on the timing and pace of the Fed’s next policy move.