Asian equity markets opened Friday, May 29 with a broadly positive tone as investors extended buying into technology, semiconductor, and export-driven sectors. South Korea and Japan led the regional advance, while Australia and India also posted gains. In contrast, Hong Kong and mainland China underperformed, highlighting a persistent divergence across Asia-Pacific markets as investors balance growth optimism with macroeconomic uncertainty.

Sentiment remains shaped by expectations around global interest rates, AI-driven technology investment flows, and regional currency movements. At the same time, holiday-related disruptions across multiple exchanges continue to thin liquidity, amplifying short-term volatility and contributing to uneven price action across regional indices.

South Korea and Japan Drive Regional Momentum on Tech Strength

South Korea’s KOSPI Composite Index surged 1.99% to 8,348.58, leading regional gains during the morning session. The advance was driven by semiconductor producers, artificial intelligence infrastructure firms, and export-oriented technology names, reflecting renewed investor appetite for high-growth sectors.

The move underscores South Korea’s continued role as a key bellwether for global technology demand. With memory chips and advanced electronics central to global supply chains, sentiment toward Korean equities often signals broader positioning across Asia’s tech complex.

Japan also posted strong gains, with the Nikkei 225 rising 1.91% to 65,926.11. Strength was concentrated in automotive manufacturers, robotics, industrial machinery, and electronics exporters, benefiting from improved global risk sentiment and sustained demand expectations for advanced manufacturing.

The Japanese Yen Index edged higher by 0.17% to 62.81, signaling mild currency stability. While a stronger yen can weigh on exporters, equity strength suggests investors are currently prioritizing earnings momentum and global demand recovery over near-term currency headwinds.

Together, Japan and South Korea highlight a renewed rotation into cyclical and technology-linked sectors after recent sessions of mixed performance across the region.

China and Hong Kong Diverge as Sentiment Remains Uneven

Mainland China’s SSE Composite Index rose 0.12% to 4,098.64, reflecting modest gains in industrial and state-linked sectors. However, the advance remains subdued compared to broader regional strength, indicating continued caution among investors.

Market participants remain focused on China’s policy trajectory, particularly potential measures targeting infrastructure spending, manufacturing stabilization, and domestic consumption support. While sentiment has improved from earlier volatility phases, positioning remains selective.

Hong Kong’s Hang Seng Index was unchanged at 25,328.23, underscoring a pause in momentum for China-linked equities. Financials and technology stocks showed mixed performance as investors await stronger macro catalysts to drive sustained direction.

The divergence between mainland China, Hong Kong, and stronger Northeast Asian markets highlights ongoing fragmentation in regional equity leadership, with investors favoring clearer earnings and export visibility.

Australia and India Gain While Regional Liquidity Remains Thin

Australia’s S&P/ASX 200 advanced 0.70% to 8,652.90, supported by gains in mining and select financial stocks. However, energy and commodity-linked sectors remained uneven as investors reassess global demand trends, particularly tied to China’s industrial outlook.

The Australian Dollar Index rose 0.31% to 71.62, reflecting modest strength in commodity-linked currency sentiment and stable risk appetite across regional FX markets.

India’s S&P BSE SENSEX slipped 0.19% to 75,867.80, reflecting mild profit-taking after recent gains. Despite the pullback, underlying sentiment remains supported by strong domestic consumption, infrastructure investment, and steady institutional inflows.

Regional trading conditions are being significantly influenced by Eid al-Adha-related market closures across multiple jurisdictions, including Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates (Dubai and Abu Dhabi), Oman, Pakistan, Lebanon, Indonesia, Türkiye, and India. Reduced participation across these markets continues to lower liquidity and amplify intraday index moves.

Outlook: Technology Momentum and China Policy Signals Remain in Focus

As trading continues on May 29, investors will focus on whether technology-driven strength in South Korea and Japan can sustain broader regional momentum. Semiconductor demand, AI infrastructure investment, and export recovery trends remain key drivers of sentiment across Asia-Pacific equities.

Attention will also remain on China, where markets continue to look for clearer policy signals aimed at stabilizing growth, supporting manufacturing activity, and improving domestic demand conditions. Any incremental stimulus or liquidity measures could play a decisive role in shaping near-term regional direction.

Currency markets are expected to remain influential, particularly movements in the Japanese yen and Australian dollar, which provide key signals on export competitiveness and global risk appetite.

For global and Israeli investors, the current environment reflects a selectively bullish but uneven Asia-Pacific market landscape. While leadership in technology and industrial sectors continues to strengthen, holiday-related liquidity constraints, China divergence, and macroeconomic uncertainty suggest that volatility and rotation-driven trading conditions are likely to persist in the near term.