Asian markets close positive on eased US trade tensions and Takaichi's historic win in Japan

Indices

Asian equity indices are demonstrating notable resilience and upward momentum, underpinned by political developments and improved economic sentiment in both China and Japan. The Nikkei 225 (^N225) is trading at 49316.06, representing a modest gain of 0.26544 for the session and setting a new record high for the year. This performance reflects investor confidence following the confirmation of Sanae Takaichi as Japan’s next prime minister and expectations of continued pro-market policies. The SSE Composite Index (000001.SS) closed at 3916.3322, up 1.35724, buoyed by optimism around U.S.-China trade relations and robust export figures. The Hang Seng Index (^HSI) is currently trading at 26094.5, having advanced 0.91133, with technology and industrial sectors leading gains. The short-term micro-trend signals for these major indices are flat, indicating a pause as investors await further policy clarity.

Stocks

Stock activity across the region is marked by sectoral rotation and sharp movements among key names. In Japan, top performers include DeNA, which surged 6.3, and Renesas Electronics, rising 4.5, reflecting robust investor appetite for technology and innovation-driven companies. In China, Brilliance Technology Co. advanced 12.59 and Tansun Technology Co. gained 4.75, signaling strong sentiment in the tech sector. Conversely, Chinese electric vehicle manufacturers such as NIO Inc. (NIO/HK:9866) are under pressure, with recent declines of -5 to -9, as price wars and regulatory scrutiny persist. In Hong Kong, Tencent Holdings (0700.HK) and Midea Group (000333.SZ) have also experienced moderate pullbacks, reflecting selective profit-taking despite overall market strength. This sectoral divergence suggests traders are favoring growth and technology themes while remaining cautious on sectors exposed to regulatory risk.

Economic News

Recent economic data has further supported the positive tone in Asian markets. China’s GDP grew by 4.8 in Q3, with industrial output up 6.5 and retail sales advancing 3.0, indicating an ongoing recovery despite challenges in the property sector. In Japan, the Tankan index for large manufacturers improved to 14, reflecting resilience among major corporates even as the manufacturing PMI edged lower to 48.5, pointing to some sectoral headwinds. These macroeconomic signals are reinforcing the bullish narrative and supporting a rotation into growth-oriented sectors.

Economic Events

Several significant political and policy events are shaping the regional outlook. In Japan, the ruling coalition’s decision to hold a vote for a new prime minister, with Sanae Takaichi as a prominent candidate, is expected to entrench a pro-growth policy stance. The appointment of Satsuki Katayama as the next finance minister is anticipated to influence fiscal policies. In China, the Communist Party’s leadership meeting in Beijing and the upcoming Fourth Plenary Session of the 20th Central Committee are set to outline future economic reforms and strategies for market stability. These events are likely to keep investor attention focused on policy announcements and could drive further volatility as outcomes become clear.

Market Sentiment

Overall market sentiment across Asia is notably bullish, supported by positive economic data, political stability, and pro-market policy expectations in both China and Japan. The prevailing flat micro-trend signals in major indices, however, suggest that investors are adopting a cautious "wait-and-see" approach, seeking confirmation from upcoming policy releases and economic events before committing to further risk. This sentiment is driving selective sectoral outperformance, with technology and industrials in favor, while caution prevails in areas exposed to policy uncertainty and regulatory intervention.

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