Asian markets close mixed amid global uncertainty and domestic cues

Indices

Asian equity markets are displaying a patchwork of resilience and caution as investors navigate a complex landscape of domestic policy signals and global economic pressures. The Nikkei 225 (^N225) in Japan is currently trading at 48277.74, up 1.26922 for the day, reflecting a strong rebound and optimism buoyed by expectations of U.S. interest rate cuts and a robust earnings season. This upward movement, close to its 52-week high, signals persistent investor confidence in Japanese equities.

Meanwhile, the Hang Seng Index (^HSI) in Hong Kong lags behind at 25834, marking a decline of -0.29567, which reflects subdued sentiment as ongoing U.S.-China trade tensions cast a shadow over Hong Kong equities. In mainland China, the SSE Composite Index (000001.SS) remains largely unchanged at 3916.228, up only 0.10272, indicating subdued activity and investor caution. Notably, short-term micro-trend signals for all three indices are flat, underscoring a market-wide wait-and-see approach and limited directional conviction in the immediate term.

Stocks

Stock performance across the region is marked by significant sectoral rotation and heightened volatility. In China, mining and technology stocks are emerging as relative outperformers, with Zijin Mining Group (HK:2899) up 6.38 and NetEase (HK:9999) rising 6.04, signaling a rotation into sectors perceived as resilient. Conversely, Chinese electric vehicle manufacturers such as Geely Automobile (HK:0175), Li Auto (HK:2015), Nio Inc. (HK:9866), Xpeng (HK:9868), and BYD (HK:1211) have experienced declines between -5 and -9, a movement that suggests ongoing sector-specific headwinds from price wars and regulatory scrutiny.

In Japan, notable gainers include Disco Corp. (TYO:6146) up 7.5, Sumitomo Metal Mining (TYO:5713) up 6.87, and Sumitomo Pharma (TYO:4506) up 6.62, reflecting renewed interest in industrial and healthcare sectors. Conversely, semiconductor heavyweights Tokyo Electron (TYO:8035) and Advantest Corp. (TYO:6857) have posted losses of -6.5 and -7.6, suggesting sector-specific pressure possibly linked to global supply chain and trade issues.

Economic News

Recent macroeconomic data have played a pivotal role in shaping market sentiment. In Japan, the manufacturing PMI fell to 48.5 in September, down from 49.7, reflecting contracting industrial activity and demand headwinds. However, the Bank of Japan’s Tankan index for large manufacturers improved to 14, up from 13, indicating resilience among major corporates. In China, Q2 GDP growth was reported at 5.2, a robust figure in the global context, but recent holiday data showed weaker-than-expected consumption, raising concerns about the sustainability of the recovery. The World Bank has revised China’s 2025 GDP growth forecast upward to 4.8, suggesting improved near-term prospects.

Economic Events

A series of significant economic events is shaping the near-term outlook. In China, the National People's Congress, which began on October 8, is expected to provide key policy guidance and possible support measures for the market. Additionally, the release of Foreign Exchange Reserves (September) on October 9, with an estimated value of 3.31 trillion CNY, will be closely watched for insights into capital flows and external stability. In Japan, the end-of-month Bank of Japan policy meeting and scheduled speeches by BoJ officials are anticipated to clarify monetary policy direction, especially after recent leadership changes and debates over fiscal expansion. Investors are also awaiting the August U.S. Consumer Price Index (CPI) release, which could influence expectations for global interest rates and thus regional market flows.

Market Sentiment

Investor sentiment across Asian markets is best described as cautiously optimistic, with a prevailing sense of indecision. In Japan, the Nikkei 225’s continued strength and supportive policy backdrop have fostered confidence, though flat short-term trend signals point to underlying caution and a readiness to adjust positions should macroeconomic data disappoint. In China, upward GDP revisions and policy support underpin a cautious optimism, but ongoing sectoral challenges—particularly in electric vehicles—and external uncertainties such as U.S.-China trade tensions weigh on the outlook. Hong Kong remains subdued, as reflected in the Hang Seng Index’s decline and flat trend, with investors wary of further volatility amid global policy shifts and geopolitical developments.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.