Asian markets ended February 26, 2026, on a mixed note, highlighted by a powerful rally in South Korea that offset weakness in Hong Kong. Gains in Australia and Japan reinforced a generally constructive tone, though declines in select markets underscored ongoing regional divergence.

The session reflected selective strength rather than a synchronized advance, with investors rotating into high-momentum markets while trimming exposure in others.

South Korea Extends Breakout Rally

South Korea’s KOSPI Composite Index surged 3.67% to 6,307.27, marking the strongest performance across Asia. The rally builds on recent gains and suggests continued investor confidence in technology and export-oriented sectors. The sharp advance signals strong buying interest and possibly institutional inflows.

Australia’s S&P/ASX 200 rose 0.51% to 9,175.30, supported by financial and commodity-linked stocks. The Australian Dollar Index climbed 0.89% to 71.21, reflecting firm risk appetite and stronger demand for commodity-sensitive currencies.

Japan’s Nikkei 225 added 0.29% to 58,753.39. Meanwhile, the Japanese Yen Index declined 0.30% to 63.96, offering mild support to exporters. The combination of a softer yen and positive equity momentum suggests stable investor positioning.

Hong Kong Declines as China Stabilizes

In contrast, Hong Kong’s Hang Seng Index fell 1.44% to 26,381.02, marking the session’s weakest performance among major benchmarks. The decline may reflect profit-taking following recent advances or sector-specific weakness in technology and financial shares.

China’s SSE Composite Index remained nearly unchanged, dipping just 0.01% to 4,146.63. The flat performance suggests consolidation as investors assess economic signals and broader regional developments.

India’s S&P BSE Sensex slipped 0.03% to 82,250.86, effectively closing flat. The muted movement reflects balanced domestic flows and cautious investor positioning.

Currency Movements Signal Risk-On Bias

Currency markets provided additional insight into investor sentiment. The rise in the Australian dollar indicates improved demand for growth-sensitive assets, while the weaker yen supports risk appetite across export-driven markets.

The divergence between South Korea’s strong rally and Hong Kong’s decline highlights selective capital allocation across Asia. Investors appear focused on markets demonstrating sustained momentum while remaining cautious in others.

Outlook

Looking ahead, traders will monitor whether South Korea’s powerful breakout can sustain momentum and whether gains broaden to other regional markets. Stabilization in Hong Kong and firmer performance in China could strengthen overall Asian sentiment.

Currency trends will remain critical, particularly the balance between the yen and Australian dollar, as they influence export competitiveness and capital flows. Global economic indicators and central bank guidance may also shape the next directional move.

For now, February 26 reflects a region driven by targeted momentum trades rather than uniform expansion. Continued strength in leading markets could pave the way for broader participation, while persistent divergence may signal ongoing consolidation across Asia.