Asian equities kicked off 2026 with widespread gains, marked by South Korea’s key index reaching an all-time peak on Friday. Concurrently, futures linked to U.S. markets and global oil prices also showed upward momentum.
Investor confidence continues to be buoyed by the expanding potential of artificial intelligence technologies, which have generated expectations of heightened demand for semiconductors and other critical components essential to establishing data centers and the required technological infrastructure.
In Hong Kong, the Hang Seng Index surged by 2.6% to close at 26,283.53, largely propelled by a significant advance in technology stocks. Alibaba, the leading e-commerce conglomerate, saw its share price rise by 3.7%, while Baidu, known for its Ernie chatbot, soared by 9.5% after announcing intentions to spin off its AI chip division, Kunlunxin. This subsidiary plans to conduct a separate listing on the Hong Kong exchange in early 2027, pending necessary regulatory approvals.
Similarly, South Korea's Kospi index climbed 2.3% to finish at 4,309.63, strongly influenced by a 7.2% price jump in Samsung Electronics, the index’s largest constituent. Chipmaker SK Hynix, a strategic partner of Nvidia and a supplier of semiconductor components used in AI systems, gained 4%.
Market activity paused in several regions including Tokyo, Shanghai, Thailand, and New Zealand due to holidays. Elsewhere in Asia-Pacific, Australia's S&P/ASX 200 nudged up 0.2% to 8,727.30, Taiwan’s Taiex index increased by 1.3%, and India's Sensex index added 0.6%.
Despite recent manufacturing reports indicating softness in many parts of the Asia-Pacific region, trade volumes have remained resilient, reinforcing positive outlooks for export-dependent manufacturing sectors. According to Shivaan Tandon from Capital Economics, export growth from several countries has accelerated recently, suggesting near-term prospects for Asia's export-oriented industries continue to be favorable.
On the U.S. front, futures for the S&P 500 rose 0.4%, while Dow Jones Industrial Average futures increased by 0.2%. In the final trading session of 2025, U.S. stocks closed slightly lower despite strong overall annual gains, with the S&P 500 decreasing by 0.7% to 6,845.50, the Dow falling 0.6% to 48,063.29, and the Nasdaq Composite dropping 0.8% to 23,241.99. The S&P 500 set a record 39 new highs in 2025 and achieved a 16.4% increase over the year, with the Nasdaq gaining 20.4% and the Dow ending 13% higher.
The robust performance on Wall Street during 2025 was largely attributed to investor enthusiasm surrounding artificial intelligence and its anticipated positive impact across various sectors. Nonetheless, the market also endured considerable volatility during the year. Key political developments included the intermittent application of tariffs on imports globally by then-President Donald Trump, which were ultimately paused amid ongoing trade negotiations, mitigating some investor concerns. Corporate earnings reports and three reductions in Federal Reserve interest rates further supported upward market momentum.
Market participants currently anticipate the Federal Reserve to keep interest rates unchanged at its forthcoming January meeting. Jobless claims data released by the Labor Department revealed a decrease in Americans applying for unemployment benefits last week, indicating persistent strength in the labor market in spite of broader weakening signals.
On that Wednesday, all sectors within the S&P 500 registered losses, with technology stocks exerting the greatest downward pressure. Western Digital shares fell by 2.2%, and Micron Technology declined by 2.5%, despite both companies having been among the year's strongest performers.
In commodity markets on early Friday trading, silver rebounded by 4%, recovering part of the preceding day’s 9.4% decline, after a remarkable gain exceeding 140% in 2025. Gold prices also advanced by 1%, having ended the previous year with a substantial 63.7% increase.
Crude oil prices moved upward as well, with the U.S. benchmark rising 46 cents to $57.88 per barrel, and Brent crude, the international price standard, increasing 45 cents to $61.30 per barrel. Currency markets saw the U.S. dollar strengthen against the Japanese yen to 156.87 from 156.75, while the euro edged slightly lower to $1.1737 from $1.1746.