Asian markets close mixed as geopolitical tensions weigh on investor sentiment

Indices

The main Asian indices are exhibiting strong upward momentum, particularly driven by the technology sector. The Nikkei 225 has recently closed at 50.84K, marking a 1.37% gain. This positive movement reflects robust tech sector performance, notably a surge in SoftBank Group shares. The Hang Seng Index recorded a notable rally, closing at 25.98K, up by 1.75%, with optimism centered on technology and AI-related stocks. The Shanghai Composite also edged higher to 3.89K, registering a 0.41% increase, buoyed by supportive fiscal policy signals from the Chinese government. These trends collectively suggest a prevailing buy signal in technology-driven sectors across the region.

Stocks

Stocks are sharply in focus today, particularly those in the technology and AI domains. In the Nikkei 225, SoftBank Group Corp. (9984.T) stands out as the leading gainer, accelerating on acquisition news and reflecting investor enthusiasm for the tech industry. Conversely, Toho Zinc Co., Ltd. (5707.T) was the top loser with a 10.22% decline, indicating sector-specific pressures outside technology. The Hang Seng Index was buoyed by Alibaba Group Holding Ltd. (9988.HK), which climbed 8% following strategic AI partnership news with Apple Inc. In Shanghai, MetaX Integrated Circuits Shanghai Co. captured headlines by surging as much as 755% on debut, underscoring the intense appetite for domestic AI and semiconductor plays. These movements highlight a strong rotation toward high-growth technology and AI stocks.

Economic News

Recent economic data and policy announcements are shaping positive sentiment in Asian markets. In Japan, average cash earnings rose 4.1% year-on-year in July, prompting speculation of a possible Bank of Japan rate hike in the fourth quarter—a development that could impact future equity flows. In China, the Central Economic Work Conference reaffirmed a commitment to "proactive" fiscal measures to support consumption and investment throughout 2026, directly bolstering market optimism. The Hang Seng Index reflects similar positivity, riding on robust technology sector performance and confidence in AI and electric vehicle segments. Overall, these news items are reinforcing risk appetite and encouraging capital inflows into equities.

Economic Events

Key economic events are poised to influence trading over the coming days. In Japan, the highly anticipated earnings report from Sony Group Corporation (6758.T) is scheduled for February 2, 2026—a potential catalyst for tech sector sentiment. In China, Alibaba Group Holding Ltd. (9988.HK) will announce its earnings on February 5, 2026, an event likely to impact not only Alibaba’s shares but also broader sentiment toward Chinese technology giants. Additionally, the successful IPO of MetaX Integrated Circuits Shanghai Co. signals sustained investor interest in the AI and semiconductor sectors, setting the tone for related equities in the near term.

Market Sentiment

Market sentiment across the main Asian indices is decisively bullish, underpinned by strong earnings momentum in the technology sector and supportive macroeconomic policies. The Nikkei 225’s surge and the Hang Seng Index’s rally are both driven by robust investor confidence in tech and AI-related growth, while the Shanghai Composite’s steady gains reflect cautious optimism amid government stimulus. This environment is likely to foster further buying interest, particularly in technology, AI, and semiconductor stocks, while investors remain attentive to potential interest rate adjustments and upcoming earnings results.

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