Morning brief: Asian markets start 2026 higher, Baidu surges on Kunlunxin IPO

Markets opened 2026 on a cautiously positive note, extending momentum from a year-end rally amid thin holiday trading.

Investors are entering the new year facing a mix of opportunities and risks, including questions over the durability of the AI-led equity surge, a looming leadership transition at the US Federal Reserve, and the potential for renewed volatility under President Donald Trump’s policies.

Developments across Asia, commodities, and corporate news set the tone for the opening sessions of the year.

Asian markets and global assets start 2026 calmly

Trading volumes were subdued as several Asian markets remained closed for holidays, including Japan and China.

Elsewhere, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.52%, while Hong Kong’s Hang Seng Index gained 2.4%.

US equity futures pointed modestly higher, with S&P 500 futures up 0.44% and Nasdaq futures adding 0.68%.

European futures were mixed, as EUROSTOXX 50 futures fell 0.5% while FTSE futures remained almost unchanged.

Precious metals extended last year’s strong rally.

Spot gold rose 1.5% to $4,378.96 an ounce, while silver jumped 3.9% to $73.85 per ounce.

Gold’s 2025 rise was its largest in 46 years, with silver and platinum also posting record annual gains, driven by US rate cuts, geopolitical tensions, central bank buying, and ETF inflows.

In currencies, the dollar started the year on a weak footing.

The euro rose to $1.1759 and sterling to $1.3481, while the yen strengthened slightly to 156.64 per dollar.

Oil prices edged higher after steep losses in 2025, with Brent crude at $61.00 a barrel and US crude at $57.57.

Baidu surges after Kunluxin IPO filing

Shares of Baidu jumped sharply in Hong Kong, reaching their highest level since 2024, after the company filed for an initial public offering of Kunluxin, its artificial intelligence and robotics business.

The stock climbed to a high of H$143.4, up more than 93% from its 2025 low.

Management said spinning off Kunluxin would help better reflect the unit’s valuation and give investors direct exposure to AI chips, software, and hardware.

Analysts estimate Kunluxin’s valuation could exceed $3 billion, though recent Chinese IPOs have seen strong demand and sharp post-listing rallies, suggesting upside potential.

The move comes as Baidu’s core advertising business slows.

Revenue fell 7% year on year in the third quarter to RMB 32.7 billion, while net income slipped to RMB 7.32 billion.

Growth in Baidu’s AI cloud business, which rose 33% to RMB 4.2 billion, partly offset the weakness.

Analysts expect Baidu to return to growth this year, with revenue forecast to rise to RMB 136 billion.

Singapore GDP beats expectations on manufacturing surge

Singapore’s economy expanded 5.7% year on year in the fourth quarter, the fastest pace since 2021, driven largely by a sharp rebound in manufacturing.

The sector grew 15%, compared with 4.9% in the previous quarter, led by biomedical manufacturing and electronics.

The strong quarter lifted full-year GDP growth to 4.8%, exceeding the government’s earlier forecast of around 4%.

Prime Minister Lawrence Wong cautioned that sustaining this pace would be difficult, while the Ministry of Trade and Industry projects growth of 1%–3% in 2026.

Economists noted Singapore’s resilience despite trade risks and higher global uncertainty.

However, officials have warned that growth could slow as manufacturing normalises and external demand softens.

Copper extends rally after best year since 2009

Copper prices rose on the first trading day of 2026 after recording their biggest annual gain since 2009.

The metal climbed 42% in 2025, supported by mine disruptions, tariff-related trade flows, and tight supply.

On the London Metal Exchange, copper rose 0.8% to $12,522.50 a ton, after hitting a record $12,960 earlier in the week.

Nickel also gained, while aluminum was little changed. Traders continue to monitor supply risks as copper remains a key material for the global energy transition.

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