Asian stock markets opened the week with mixed sentiment on Monday, supported by Wall Street’s recent gains and expectations of future US interest rate cuts, while lingering concerns about geopolitics and China’s fragile recovery weighed on investor confidence.
Tokyo leads the gains
In Tokyo, the Nikkei 225 rose by around 1.5 per cent, reflecting investor relief that the Bank of Japan is unlikely to accelerate asset sales. The rally was driven by technology shares and exporters, benefitting from a stable yen.
South Korea’s Kospi also traded higher, adding close to 0.8 per cent, while Australia’s S&P/ASX 200 climbed by roughly 0.4 per cent, helped by mining and banking stocks.
China and Hong Kong lag behind
By contrast, Hong Kong’s Hang Seng fell nearly 0.9 per cent, as persistent worries over China’s property sector and weak consumer sentiment overshadowed hopes of stimulus. Mainland China’s Shanghai Composite was little changed, underlining ongoing caution among domestic investors.
Market watchers note that Beijing’s incremental policy support has so far failed to boost confidence, with foreign investors maintaining a wait-and-see approach.
Drivers of market sentiment
The primary positive factor is the strong finish on Wall Street last week, where expectations are rising that the Federal Reserve could signal another rate cut before year-end. Lower borrowing costs in the US tend to improve global liquidity, particularly supporting Asian exporters.
At the same time, regional risks remain. Recent trade and regulatory tensions, including tighter US visa rules affecting parts of the tech sector, have added uncertainty. Currencies in Asia stayed broadly stable on Monday morning, while commodities such as oil and gold edged slightly higher, signalling a cautious approach to risk.
Sector focus and regional outlook
Technology and growth stocks remain sensitive to any signals from Washington and Beijing. Export-oriented markets such as South Korea and Taiwan could benefit from a weaker dollar environment if Federal Reserve easing materialises.
Australia’s positive tone reflects investor appetite for defensive assets like banks and miners, while China’s subdued trading indicates that investors remain unconvinced about the strength of its recovery. Hong Kong, in particular, continues to act as a barometer for external confidence in China’s outlook.
Outlook for the week
Analysts suggest that further clarity from the Federal Reserve will be critical in shaping sentiment. Any signs of stimulus from Beijing could also lift confidence across the region. Until then, Asia’s markets are likely to continue trading with a mix of cautious optimism and selective risk-taking, as investors weigh the potential for global monetary easing against persistent domestic headwinds.
Newshub Editorial in Asia – 22 September 2025
Recent Comments