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Asian equities showed a mixed trend today, mirroring global economic uncertainty and investor hesitation. While a few markets proved resilient, others were hit by inflation fears, trade tensions, and monetary policy changes.
Major Asian stock market indices as of 11.07 am on 26 Feb 2025 are as follows:
The Hang Seng Index in Hong Kong rose by 3.26%, closing at Rs 23,785.94. The sudden jump comes on the heels of a series of falls and indicates increasing investor confidence. The extremely bullish mood indicates optimism, probably driven by hopes of economic recovery and investment in core sectors.
Japan's Nikkei 225 dropped 0.46% to Rs 38,060.46, indicating sustained investor jitters. Although the fall was modest, the strongly bearish sentiment is a testament to doubt over global economic directions and domestic issues, which have cooled interest in Japanese equities.
The Shanghai Composite in China rose 0.76% to a close at Rs 3,371.55. While the upturn was modest, it is a reflection of better investor confidence. The extremely bullish stance points to confidence in the economic stability of China despite the nation's presence in persistent market volatility and trade tensions.
The South Korea KOSPI Index increased by 0.40% to 2,640.79, maintaining its resilience trend. The positive sentiment reflects investor optimism about the economic fundamentals of South Korea, underpinned by solid exports and stable corporate profits.
Taiwan Weighted Index rose 0.34%, closing at 23,364.36. This consistent performance indicates optimism in Taiwan's economy, especially its position in global technology supply chains. The positive sentiment indicates investors consider Taiwan's market a solid player in the semiconductor and electronics industries.
Thailand's SET Composite rose 0.88%, closing at 1,217.06. Despite today's rise, the extremely bearish mood indicates that long-term worries still linger regarding Thailand's economic growth and political stability. Investors are still wary of the nation's capacity to maintain economic momentum.
Indonesia's Jakarta Composite dropped 0.37% to 6,562.89, showing continued woes. The extremely bearish mood signifies strong doubts regarding Indonesia's economic path, underpinned by local uncertainties and global pressures.
Several global drivers have underpinned today's mixed Asian stock market performance.
Recent US economic statistics have fueled worries of a slowdown, hurting investor sentiment. The fall in the S&P 500 and ongoing inflation fears have caused greater market volatility in Asia.
The US has raised the level of restrictions on Chinese investment and tariffs on Canada and Mexico, making global trade increasingly uncertain. All this has, in particular, hit Hong Kong and mainland China hard, as investor sentiment here remains cautious.
Rising inflation in Singapore and monetary policy changes in South Korea have caused additional complications for investors. Concurrently, falls in US stock futures and the heightened popularity of gold as a safe-haven asset are indicative of a more pervasive risk-averse sentiment amongst worldwide investors, which has also had an impact on Asian markets.
The imposition of US tariffs on key trading partners has had far-reaching effects on targeted sectors in Asian markets.
Shares of top automobile manufacturers with operations in hard-hit areas registered sizeable declines. Toyota and Nissan in Japan and Kia Motors in South Korea suffered downturns similar to other stocks. Kia Motors registered a decline of over 7%, largely on account of issues regarding its Mexican production plant and possible disruption to its supply chain.
Taiwanese tech companies like Foxconn, Quanta, and Inventec lost stocks between 8% and 10%. At the same time, the US dollar rose to a record high against the Chinese yuan in offshore trading, affecting trade balances and investor confidence.
Asian stock markets are likely to stay volatile as they continue to grapple with global economic woes. Some of the markets, including Hong Kong and South Korea, have shown resilience, while others, including Japan and Indonesia, are confronted with more sustained headwinds.
The threat of a wider trade war hangs over Asian economies, especially export-oriented economies like South Korea and Taiwan, which could find it difficult to stay profitable under changing trade policies.
Domestic consumption-driven markets like India and Indonesia might be more resilient in withstanding external shocks. Local demand and structural reforms could act as a buffer to these economies against the effects of global economic slowdowns.
Investors will be keen to invest in businesses with robust pricing power and lower dependence on US demand to diversify away from trade tensions. Short-term challenges notwithstanding, Asian markets have compelling long-term growth drivers. Areas such as artificial intelligence and semiconductors are leading the development of the future of technology globally.
As long as uncertainty persists, close observation of economic indicators and policy actions will be necessary to grasp the direction of Asian stock markets in the months ahead.
