Asian markets showed a mixed performance on Thursday morning, October 9, as regional investors balanced optimism in South Korea and China against weaker sentiment in Japan and Hong Kong. With trading volumes subdued due to holiday closures, market direction was shaped largely by selective buying in tech and industrial sectors.

South Korea’s KOSPI Leads Regional Gains

South Korea’s KOSPI Composite Index rose 2.70% to 3,549.21, standing out as the region’s strongest performer despite the Seoul Stock Exchange and KOSDAQ being closed for the Chuseok Alternative Holiday. The sharp rise came as investors positioned themselves ahead of upcoming earnings releases and potential fiscal support measures expected later this month.

Investor optimism has been underpinned by positive forecasts for South Korea’s semiconductor sector and robust export data. Analysts noted that pre-holiday institutional buying and expectations of continued demand for memory chips helped fuel the rally. Even with the domestic markets shut for the holiday, sentiment toward Korean equities remains constructive heading into the fourth quarter.

China’s Gradual Rebound Gains Momentum

The Shanghai Composite Index gained 0.52% to 3,882.78, marking a steady improvement in investor sentiment. Chinese markets were supported by recent indicators showing stability in manufacturing output and an uptick in infrastructure investment. Investors are increasingly confident that Beijing’s latest monetary and fiscal measures will sustain the recovery into year-end.

The government’s ongoing efforts to stimulate domestic consumption and ease property market pressures have further lifted confidence. However, analysts caution that external demand remains a challenge, particularly as global growth slows and trade tensions persist. The Chinese yuan traded narrowly, reflecting cautious optimism about the near-term outlook.

Japan and Hong Kong Drag on Regional Sentiment

Japan’s Nikkei 225 fell 0.45% to 47,734.99 as the Japanese yen weakened by 0.50%, pushing the Yen Index to 65.49. The currency’s weakness, coupled with rising import costs, weighed on major industrial and consumer stocks. Despite strong export data earlier in the week, investors appear cautious about Japan’s inflation trajectory and potential shifts in Bank of Japan policy.

Hong Kong’s Hang Seng Index declined 0.48% to 26,829.46, dragged down by selling in Chinese tech giants and financial shares. Investor sentiment remains fragile as global funds reduce exposure to high-beta sectors amid uncertainty over U.S. interest rates and slowing Chinese growth. Meanwhile, Australia’s S&P/ASX 200 edged lower by 0.10% to 8,947.60, while India’s Sensex slipped 0.19% following profit-taking after recent record highs. The Australian Dollar Index hovered at 65.82, down 0.01%.

Forward Outlook: Focus Turns to Global Data and Earnings

Looking ahead, Asian markets are expected to remain directionless in the near term as investors await key U.S. inflation and labor data that could shape the Federal Reserve’s rate outlook. Regional attention will soon shift toward China’s third-quarter GDP release and Japan’s upcoming corporate earnings, which will offer insights into regional growth momentum.

When South Korean markets reopen after the Chuseok Alternative Holiday, traders will watch whether the KOSPI’s strong performance can sustain amid global uncertainty and sectoral rotation. While volatility may persist, improving macro data in Asia and continued demand for technology exports could provide a foundation for recovery heading into the final quarter of the year.