Asian markets close lower as gold hits record high on safe-haven rush after Trump tariff threats

Indices

The main Asian indices displayed a mixed performance as of January 21, 2026, shaped by regional political developments and global tensions. The Nikkei 225 (NIKKEI:JP) recently touched a record high, closing at 54.34K on January 14, 2026, reflecting robust investor confidence in Japan's equities. However, the index declined by 0.4% on January 21, weighed down by domestic uncertainty following Prime Minister Sanae Takaichi's call for a snap election.

The Hang Seng Index (HSI:HK) showed resilience, rising by 0.56% to close at 27K. This uptick came despite tightening financial conditions in mainland China.

The Shanghai Composite Index (SSE:CN) registered a modest rise earlier in the session, but ultimately reversed gains to close down by 0.31% at 4.13K, as regulators raised margin requirements to curb speculation.

These movements suggest that while underlying momentum remains positive—especially in Japan—market participants are exercising caution in response to evolving political and regulatory landscapes.

Stocks

Several stocks and sectors stood out within the main indices. In Japan, Advantest (NIKKEI:JP) surged by 8.5% and Tokyo Electron (NIKKEI:JP) gained 8.3%, both benefiting from strong demand in the technology sector. SoftBank Group (NIKKEI:JP) also advanced by 4.3%, reflecting investor appetite for high-growth tech plays.

On the downside, Toho Zinc (NIKKEI:JP) tumbled by more than 10%, while Mitsui Engineering & Shipbuilding, Fujikura, Sumitomo Metal Mining, and Kawasaki each lost between 2.2% and 2.6%, suggesting some rotation away from industrials amid uncertainty.

In Hong Kong, WuXi Biologics (HSI:HK) led gains with an impressive jump of 13.95%, followed by BYD (HSI:HK) at 6.04%, Meituan (HSI:HK) at 5.71%, and Ping An Insurance (HSI:HK) at 5.59%, reflecting strong optimism in biotech and technology-related stocks.

In mainland China, the Information Technology sector advanced by 4.1% before broader market weakness set in. This strength in tech indicates a continued preference for growth sectors, though regulatory tightening may temper short-term enthusiasm.

Economic News

Recent economic news has had a pronounced impact on market direction. Global volatility increased on January 21, 2026, due to escalating geopolitical tensions, particularly after U.S. President Donald Trump threatened new tariffs over Greenland. This uncertainty spurred a flight to safety, with gold prices surging above $4.8K as investors sought to hedge risk.

In China, regulators' decision to double the minimum margin requirement for stock purchases to 100% was a significant move to curb speculative trading. This policy shift reversed early gains and led to a 0.31%, highlighting the market's sensitivity to leverage restrictions.

Economic Events

Investors are closely watching U.S. President Donald Trump's upcoming speech at the World Economic Forum in Davos, Switzerland. His remarks are anticipated to focus on his administration's achievements and could influence risk appetite globally, especially if new policy directions or trade measures are announced. The potential for a snap election in Japan, with speculation around increased fiscal stimulus, also remains a key event to monitor for its impact on the yen and Japanese equities.

Market Sentiment

Overall sentiment across Asian markets remains cautious but not pessimistic. The Nikkei 225's recent record high suggests underlying confidence, yet the subsequent decline reflects wariness stemming from political uncertainty in Japan. The Hang Seng Index's modest rise indicates resilience and cautious optimism, despite ongoing concerns about global trade. In China, sentiment is being tested by regulatory actions aimed at curbing leverage, resulting in a more defensive stance among investors.

This combination of robust sectoral performance, especially in technology and biotechnology, with heightened sensitivity to political and regulatory developments, implies that traders are balancing risk and opportunity with a clear bias toward defensive positioning.

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