Asian stocks track US gains in 'Santa Claus rally'

HONG KONG, China — Asian markets were higher on Wednesday, tracking Christmas holiday gains on Wall Street, with investors betting on the US Federal Reserve cutting interest rates as early as March.

Markets in Japan, Australia and Hong Kong all rose, with bourses in the latter two reopening after the Christmas trading break.

Market sentiment has been largely positive since the Fed's last meeting, when it indicated the rate-hike cycle could be nearing its end, with inflation beginning to slow.

Global markets were also positively affected by the so-called "Santa Claus rally", which has historically seen stocks tick higher -- albeit at thinner volumes -- during the end-of-year holiday period.

"Since '69, the S&P has averaged a 1.3 percent gain in the Santa Rally, and with the market up so much this year, punctuated with an 8-week winning streak, there are not many sellers willing to book taxable gains to avoid a weak possibility of a correction," said investor Louis Navellier in a note.

Still, the main focus for investors will remain the Fed, whose rate-hike cycle has driven market activity ever since it began last year.

"The bets for a March Fed cut continue to grow, helping to propel stocks higher," said Navellier.

"Interest rates are essentially flat, and the US dollar index continues to fall."

Tokyo stocks closed up more than one percent, with investors continuing to react to signals from the Bank of Japan that it may reverse its ultra-loose monetary policy, although the timing of the move remains unknown.

Hong Kong, Shanghai, Sydney, Seoul, Taipei, Wellington, Mumbai, Jakarta and Kuala Lumpur were all up.

European markets rose at the open, with Paris, Frankfurt and London all starting the day on the front foot.

On Tuesday, Wall Street stocks continued their positive momentum, with the Dow and broad-based S&P 500 both rising 0.4 percent, while the tech-rich Nasdaq Composite Index climbed 0.5 percent.

Bucking the rising trend, however, was Apple, whose share price dipped 0.3 percent after a US ban on some of its smartwatch models came into effect, a byproduct of a patent dispute.

The ban stems from a complaint made to the International Trade Commission in