Most Asian markets advanced on Monday, led by Chinese AI stocks amid rising optimism about the sector, though gains were limited by mounting geopolitical and macroeconomic risks. Trading volumes across the region were also muted due to a market holiday in Japan.
Technology stocks led the session, supported by gains in Chinese AI names and by following a rally on Wall Street late Friday. Weaker-than-expected U.S. nonfarm payrolls data also offered some backing, though near-term rate expectations were unchanged.
S&P 500 futures slipped 0.5% by 00:04 ET (05:04 GMT) after reports of a U.S. government probe into the Federal Reserve, which Chair Jerome Powell said was politically driven, raised concerns about the central bank’s independence.
Meanwhile, persistent global geopolitical tensions—including protests in Iran, a U.S. incursion into Venezuela, diplomatic friction between China and Japan, and the White House’s push to acquire Greenland—continued to weigh on sentiment.
Asian tech stocks rise, led by a rally in Chinese AI shares
South Korea’s KOSPI led regional gains, rising 1.2% thanks to strength in technology and semiconductor stocks. Hong Kong’s Hang Seng index climbed 0.8%, driven by gains in tech shares, while China’s mainland indices—the Shanghai Shenzhen CSI 300 and Shanghai Composite—advanced between 0.5% and 1%.
In Hong Kong, several newly listed AI companies continued their strong momentum. Z.AI, trading as Knowledge Atlas Tech (HK:2513) and recognized as China’s first publicly listed “AI tiger,” surged 25% on Monday.
Fellow newcomer MiniMax Group Inc (HK:0100) jumped over 20%, while chipmaker Shanghai Iluvatar CoreX SemiCon Co (HK:9903) gained nearly 3%. On the mainland, Cambricon Technologies Corp Ltd (SS:688256) rose by more than 3%. Taiwan’s TSMC (TW:2330), the world’s largest contract chipmaker, saw its shares increase 1.4% following strong year-on-year December sales reported last Friday.
TSMC’s solid performance, together with NVIDIA’s (NASDAQ:NVDA) recent chip launch and positive reception at the CES trade show, bolstered investor sentiment toward AI stocks.
Nevertheless, the sector was still recovering from significant losses experienced through late 2025 amid concerns about inflated valuations and circular investment patterns in AI.
Asian stocks open 2026 with mixed performance amid tech gains and geopolitical concerns
Broader Asian equities climbed on Monday, although the region still showed a mixed performance in the early weeks of 2026. A surge in technology stocks helped lift markets, but rising geopolitical tensions around the world dampened appetite for risk assets over the past week, counterbalancing much of the tech‑led rally.
South Korea’s KOSPI and Japan’s Nikkei 225 were among the strongest performers in the opening week, and Chinese benchmarks also finished higher, while indices with less tech exposure underperformed. Singapore’s Straits Times Index gained 0.7%, continuing its advance after the government signalled potential changes to sovereign wealth fund investment rules for GIC and Temasek. Australia’s ASX 200 rose 0.5%, supported by gains in mining stocks as precious and base metals strengthened.
In contrast, India’s Nifty 50 lagged its regional peers, dropping 0.5% amid increasing uncertainty over potential new U.S. trade restrictions on New Delhi. Geopolitical developments—including a U.S. intervention in Venezuela, ongoing diplomatic tensions between China and Japan, fears of possible U.S. action against Iran, and slow progress toward a Russia‑Ukraine ceasefire—kept market sentiment cautious.
Sources: Investing
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