Equities in Asia experienced fluctuations on Thursday following a record day on Wall Street, fueled by inflation data that raised expectations of a US interest rate cut next week. Market sentiment was also influenced by hopes for additional economic stimulus from China.

In South Korea, the Kospi index rose for a third consecutive day, partially recovering from a previous sell-off triggered by President Yoon Suk Yeol's brief martial law declaration. This news comes amid rising anticipation that the Federal Reserve will lower borrowing costs for the third time in a row, as inflation data in the US for November was in line with expectations. While inflation remains above the Fed's 2% target, there is a 98% chance that policymakers will approve a rate reduction.

In the US, the Nasdaq surged above 20,000 points for the first time, and the S&P 500 came close to its own record. However, analysts warned that the outlook for 2025 remains uncertain, with concerns that the decline in inflation might be losing momentum while economic activity and the labor market remain resilient. Some analysts expect the Fed to pause after the December cut, potentially for an extended period.

In China, stocks in Hong Kong and Shanghai inched upward as traders hoped for further measures to support the economy, which has struggled with weak consumer spending and a property crisis. President Xi Jinping and other officials announced plans for a more active fiscal policy, including potential interest rate cuts and additional liquidity for lending. However, some market observers remain skeptical about the government's commitment to substantial financial interventions, such as "helicopter money."

Meanwhile, tensions in South Korea over President Yoon’s martial law decision continue, with lawmakers preparing for a second impeachment vote this weekend. The South Korean won remains near a two-year low against the dollar amid the political uncertainty.

In other markets, Tokyo's Nikkei gained more than 1% on the back of a weaker yen, while Singapore and Taipei also saw gains. However, markets in Sydney, Wellington, Manila, and Jakarta experienced losses.

The euro remained under pressure ahead of an expected rate cut by the European Central Bank, and France's President Emmanuel Macron faced challenges in appointing a new prime minister after the removal of Michel Barnier.

Key figures:

Tokyo (Nikkei 225): +1.3% at 39,881.10

Hong Kong (Hang Seng Index): +0.3% at 20,210.71

Shanghai (Composite): +0.1% at 3,437.20

Euro/dollar: $1.0502

Pound/dollar: $1.2763

Dollar/yen: 152.20 yen

West Texas Intermediate: $70.24 per barrel (down 0.1%)

Brent North Sea Crude: $73.51 per barrel (flat)