Asian stock markets opened in 2026 on Friday, with Hong Kong and South Korea leading the gains in the technology sector. This was amid the holiday closure in key markets that kept the trading volumes muted.
Despite the subdued trading volumes, the risk tolerance, supported by a stronger comeback of technology and semiconductor stocks, resulted in extended gains from the end of 2025.
While the western markets like the US showed a downward trend, most Asian markets ended 2025 with sharp gains, largely influenced by a rally in the technology stocks as the demand for AI applications, data centers, and advanced chips increased.
Chipmakers Rally Results in an Asian Market Hike
The surge in the Asian markets was largely caused by heavyweight chipmakers, with Samsung Electronics showing a jump of 125% and SK Hynix climbing by 274% in 2025, together accounting for more than 40% of the benchmark’s market capitalization.
Hong Kong’s Hang Seng index closed 2025 with over 27% annual gains, and already increased by 2% on Friday. This increase was caused by tech giants and internet firms and supported by the self-reliant Chinese chip-making industry.
South Korea’s KOSPI, with Samsung Electronics and SK Hynix moving between 2.5% and 4%, rose by 1.3%. With a rise of over 75% in 2025, backed by a strong demand for semiconductors used in AI and high-performance computing, the KOSPI index was among the best-performing markets at the global level.
China’s Shares Boosted by the Tech War
The worries about the slowing economy of China were made less uptight by artificial intelligence. The Shanghai market logged its highest in six years due to the expectations around the Chinese AI, especially through Beijing’s efforts to create a self-sufficient tech supply chain.
While Hang Seng showed a surge of 27% in 2025, one of its best performances since 2017, the Shanghai Composite Index capped an 18% gain, its best since 2019. China’s blue-chip CSI300 Index also clocked in an 18% gain in 2025.
The share prices supported by the Chinese government stimulus, increasing confidence in Chinese technology, and the appreciating value of the yuan all contributed to the achievement of a stronger market for the country.
China’s yuan also had shown a breach of the 7-per-dollar level for the first time in almost three years, and has been on track for the biggest annual rise since 2020.
With the appreciating value of the nation’s currency, Western Securities expects this upward market trend of the Chinese Stock Markets to continue in 2026.
Japan’s Frontline Stock Performance
Following South Korea’s KOSPI, Japan’s equities became the second-best performer of Asia in 2025, driven by the tech sector. Japan’s Nikkei surged 26%, its third consecutive yearly gain and the highest since 2023. The Topix increased by 22%.
Benefitting from a corporate governance push by the Tokyo Stock Exchange, the Japanese equities rushed to the top in 2025, along with investment from the artificial intelligence sector.
The fiscal stimulus campaign after Sanae Takaichi’s election as the prime minister also gave an edge to Nikkei. “The first half of the year was weighed down by global economic instability, including rising prices, labour shortages, and U.S. tariffs,” said Takaichi at a ceremony at the exchange.
“But in the latter half, the resilience of Japanese companies, together with policy support, propelled the Nikkei to a remarkable turnaround, rising past the 50,000 mark for the first time in history.”
Kioxia Holdings, a supplier of memory chips, one of the Nikkei’s biggest gainers for the whole year, had its stock gain 540% in 2025. Companies like Fujikura, Mitsui Mining & Smelting, and Mitsubishi Heavy Industries are highly advantaged from the inferred demand from AI. Masayoshi Son-led SoftBank Group also had a major win in 2025, with a 93% increase.
What Does the Market Look Like Globally?
While Asian markets were enjoying gains, indexes from the rest of the world were having a moment of low, where the markets were subdued due to the holiday-thinned trading.
Australia’s S&P/ASX 200 made a gain of 0.2% while Singapore’s Straits Times Index earned an edge of 0.4%. India’s Nifty 50 also showed a modest gain of 0.2%.
