Asia-Pacific markets close higher, led by South Korea’s Kospi surge following Wall Street gains

Indices

The Kospi (KOSPI) recently suffered a sharp decline, plunging over 5 on February 1, 2026), primarily due to a sell-off in heavyweight chipmakers. This movement suggests a cautious outlook, especially in technology sectors, and highlights the market's sensitivity to sector-specific shocks.

The Nikkei 225 (N225) remains robust, hovering near record highs and recently achieving a peak of 51.31K on October 28, 2025. Optimism in AI-related stocks is fueling this performance, although recent volatility, such as a 1.6 amid China-Japan tensions, signals the need for vigilance.

The Hang Seng Index (HSI) has displayed mixed momentum. On August 25, 2025, it surged 1.94 to close at 25.83K, driven by technology sector strength. More recently, on January 28, 2026, it advanced 2.4 to 27.78K, buoyed by gains in technology and financials.

The Shanghai Composite (000001) has posted modest advances, closing at 3.92K with a 1.4, and later at 4.08K. Policy support and economic recovery confidence are underpinning this resilience. Overall, the indices reflect a complex interplay of sector-specific movements, policy-driven optimism, and episodes of geopolitical and macroeconomic volatility.

Stocks

Several stocks are at the forefront of trading activity and market attention. In South Korea, Samsung Electronics and SK Hynix, both key semiconductor players, experienced declines between 4.8 and 6.5, intensifying the Kospi’s downward pressure. In contrast, top gainers such as Dongyang Express (+30) and Chunil Express (+29.8) highlight sector rotation and speculative interest.

In Japan, the Nikkei’s momentum is fueled by SoftBank Group, Nintendo, and Fast Retailing. However, SoftBank Group shares dropped 6.6 after announcing the sale of its entire $5.83B, signaling that strategic portfolio moves can spur volatility even among index leaders.

In Hong Kong, Zijin Mining Group (+6.38) and NetEase (+6.04) are leading the gains, while Chinese property stocks have rebounded on policy easing. In China, East Money Information (+5.7), Zhejiang Sanhua (+1), and Leo Group (+6.9) are among the most active, suggesting sector-specific confidence. Conversely, Suzhou Gyz Electronic suffered a 20, reflecting sectoral risks.

Strategically, traders should monitor semiconductor and technology stocks for signs of stabilization or further correction, and watch for momentum in sectors benefiting from policy support or rotation.

Economic News

Recent economic data and news have been pivotal in shaping market dynamics. South Korea’s exports grew 6.8, with semiconductor shipments soaring 41.8, enhancing confidence in the sector’s earnings outlook despite recent volatility.

In Japan, real wages dropped at the fastest pace since January 2025, raising concerns about domestic consumption and long-term economic growth. This may temper bullish sentiment, even as the Nikkei approaches historic highs.

In China, policy support is evident as Shanghai has eased homebuying rules, spurring a rally in property stocks. Nonetheless, companies like China Vanke still posted a net loss of ¥12B, highlighting ongoing sector headwinds.

Economic Events

Geopolitical developments, particularly escalating tensions between China and Japan, have injected volatility into both the Nikkei 225 and Shanghai Composite, with the former dropping 1.6 and the latter closing marginally lower. Conversely, the recent easing of U.S.-China trade tensions fostered optimism, helping the Nikkei break the 50K milestone for the first time.

Looking ahead, continued policy interventions in China and further developments in regional trade and diplomatic relations are likely to influence the trajectory of the main Asian indices.

Market Sentiment

Overall sentiment across Asian markets is mixed, oscillating between optimism in technology and AI sectors and caution prompted by geopolitical and macroeconomic uncertainties. In Korea, the sharp Kospi decline points to fragile confidence, especially in semiconductors, though strong export growth offers a potential counterbalance. Japanese sentiment remains bullish in AI and technology, but is tempered by soft wage data and yen appreciation risks. Hong Kong and Shanghai are benefiting from government stimulus measures, with particular strength in property and technology names.

This nuanced sentiment suggests that investors are responsive to both policy signals and sector-specific developments, adjusting exposure dynamically in response to rapidly evolving risk factors.

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