Asian equity markets opened Wednesday, February 18, in the green across most major benchmarks, reflecting steady risk appetite during the morning session. While Japan and Australia led gains, mainland Chinese stocks underperformed, highlighting diverging regional momentum as investors navigate holiday-related liquidity conditions and shifting macro signals.

Japan and Australia Lead Early Gains

Japan’s Nikkei 225 surged 0.94 percent in early trade to 57,096.22, extending its recent upward trajectory and positioning itself as the regional outperformer. The rally reflects sustained foreign inflows, corporate earnings resilience, and a still-supportive domestic liquidity backdrop. Despite a 0.33 percent decline in the Japanese Yen Index to 65.25, currency softness may be further supporting export-oriented names, reinforcing Tokyo’s equity strength.

In Australia, the S&P/ASX 200 rose 0.41 percent to 8,995.90, supported by strength in financials and resource-linked stocks. The Australian Dollar Index edged higher by 0.11 percent to 70.83, signaling relative currency stability. For global investors, the alignment between a firm equity market and a steady currency underscores confidence in Australia’s macro stability amid ongoing global rate recalibration.

India’s S&P BSE SENSEX added 0.21 percent to 83,450.96, maintaining its constructive bias as domestic flows and long-term growth expectations continue to underpin valuations. The gradual advance suggests disciplined positioning rather than speculative momentum, consistent with the broader tone across Asia-Pacific markets.

China Under Pressure Amid Chinese New Year Dynamics

In contrast to the broader regional gains, the SSE Composite Index declined 1.26 percent to 4,082.07, making mainland China the weakest performer in the session so far. The underperformance comes as investors continue to assess economic data and liquidity conditions surrounding Chinese New Year.

Market attention remains closely tied to holiday-adjusted trading schedules and capital flows across key regional exchanges. China – Shenzhen Stock Exchange – Chinese New Year and China – Shanghai Stock Exchange – Chinese New Year dynamics are influencing turnover and institutional activity. Similarly, Hong Kong – Hong Kong Stock Exchange – Chinese New Year considerations are shaping participation levels in the Hang Seng, which nevertheless rose 0.52 percent to 26,705.94.

Broader regional markets are also navigating holiday-related impacts. Singapore – Singapore Stock Exchange – Chinese New Year conditions, Taiwan – Taiwan Stock Exchange – Chinese New Year adjustments, and Vietnam – Hanoi Stock Exchange – Lunar New Year alongside Vietnam – Ho Chi Minh City Stock Exchange – Lunar New Year all contribute to moderated liquidity profiles across Asia.

South Korea Diverges as KOSPI Slips

South Korea presented a more cautious tone, with the KOSPI Composite Index falling 0.28 percent to 5,507.01. The decline stands out against the region’s generally positive performance and may reflect sector-specific adjustments in technology and export-sensitive names.

South Korea – Seoul Stock Exchange – Korean new year and South Korea – KOSDAQ – Korean new year factors are also influencing investor participation and trading volumes. With institutional positioning often recalibrated around the holiday period, short-term volatility may remain elevated in Seoul compared to its regional peers.

Currency markets across Asia remain relatively stable, suggesting that equity moves are being driven more by domestic flows and sector rotation than by macro currency shocks. This stability provides a constructive backdrop for risk assets, particularly in export-driven economies.

Outlook: Liquidity, Earnings, and Macro Signals in Focus

As the Asian trading day progresses, investors will closely monitor whether early momentum in Japan and Australia can be sustained through the afternoon session. Liquidity conditions linked to Chinese New Year and Lunar New Year across multiple exchanges remain a key variable, potentially amplifying price swings in thinner markets.

Looking ahead, institutional investors will focus on corporate earnings guidance, capital flow trends, and any signals from global central banks that could reshape rate expectations. Mainland China’s relative weakness may either present selective entry opportunities or signal deeper caution if selling pressure intensifies.

For Israeli and global portfolio managers alike, the coming sessions will hinge on whether regional breadth improves beyond Japan-led strength. Sustained currency stability, continued foreign inflows, and clarity on post-holiday trading patterns will determine whether Asia’s morning optimism evolves into a broader, durable risk-on phase.