Asian equity markets opened Friday, February 20, with a mixed tone as investors navigated a holiday-thinned trading environment across parts of the region. While select benchmarks posted gains in early hours, broader sentiment remained cautious amid reduced liquidity and divergent performance across major Asian indices.

With several exchanges closed for Chinese New Year and Lunar New Year celebrations, price action during the morning session has been shaped by lighter volumes and selective positioning rather than broad-based conviction.

South Korea and Hong Kong Lead Gains

South Korea’s KOSPI Composite Index advanced 1.00 percent to 5,734.30 in early trade, outperforming most regional peers. The move reflects renewed buying interest in large-cap technology and industrial names, as global risk appetite shows signs of stabilization following recent volatility in international markets.

In Hong Kong, the Hang Seng Index climbed 0.52 percent to 26,705.94, supported by selective strength in financials and consumer-linked stocks. Investors appear to be positioning cautiously ahead of next week’s anticipated macroeconomic data releases from the United States and Europe, which could influence global capital flows into emerging and Asia-Pacific markets.

However, gains in these markets were partially offset by weakness elsewhere. Japan’s Nikkei 225 fell 1.02 percent to 56,879.74, reflecting profit-taking after recent advances. The softer tone in Tokyo coincided with a 0.12 percent decline in the Japanese Yen Index, which traded at 64.52. Currency movements remain relatively contained, suggesting that foreign exchange markets are not yet signaling a decisive shift in regional risk sentiment.

Mainland China Weakness Amid Holiday Closures

Mainland Chinese equities showed early pressure, with the SSE Composite Index down 1.26 percent to 4,082.07 during limited trading activity. It is important to note that several major exchanges across the region are closed in observance of the Chinese New Year and Lunar New Year holidays, contributing to fragmented liquidity conditions.

The Shanghai Stock Exchange in China is closed for Chinese New Year. The Shenzhen Stock Exchange in China is also closed for Chinese New Year. In addition, the Mongolia Stock Exchange in Mongolia is observing the Chinese New Year holiday. Taiwan’s Taiwan Stock Exchange remains closed for Chinese New Year as well.

In Southeast Asia, both the Hanoi Stock Exchange and the Ho Chi Minh City Stock Exchange in Vietnam are closed for Lunar New Year celebrations. These closures significantly reduce cross-border flows and limit institutional participation, often leading to sharper but less reliable intraday price swings in open markets.

The reduced trading universe can amplify volatility in active exchanges such as Hong Kong, Japan, and South Korea, where international investors may concentrate their activity while waiting for full regional participation to resume next week.

Australia and India Diverge as Investors Rebalance

Australia’s S&P/ASX 200 slipped 0.14 percent to 9,073.60 in the morning session, as energy and materials stocks faced mild selling pressure. The Australian Dollar Index edged higher by 0.16 percent to 70.54, indicating modest currency resilience despite softer equity performance.

In India, the S&P BSE SENSEX declined 1.48 percent to 82,498.14, marking one of the sharper drops in the region. The pullback reflects a combination of valuation concerns and cautious positioning ahead of domestic economic data releases. Foreign institutional investors have recently adjusted exposure to emerging markets, and India remains sensitive to shifts in global interest rate expectations and U.S. Treasury yields.

Overall, the mixed performance across Asia underscores a market environment defined by selective risk-taking rather than broad directional conviction.

Outlook: Liquidity Return and Global Data in Focus

As trading continues through the Friday morning session, investors are likely to remain cautious until regional liquidity normalizes following the Chinese New Year and Lunar New Year holidays. The reopening of key exchanges, including those in mainland China, Taiwan, Mongolia, and Vietnam, will be critical in setting a clearer regional trend.

Looking ahead, global macroeconomic data, U.S. interest rate expectations, commodity price dynamics, and currency stability will shape near-term sentiment in Asian markets. For Israeli and international investors monitoring Asia exposure, the key variables will include cross-border capital flows, technology sector momentum, and any signals of policy shifts from major central banks. In a holiday-thinned environment, volatility may remain elevated, but next week’s full participation across regional exchanges could provide a more definitive direction for Asia-Pacific equities.