Highlights:

– Shanghai Composite leads gains with a 0.37% rise
– Nikkei 225 and KOSPI retreat amid cautious sentiment
– Currencies trade mixed, with the yen weaker and Aussie dollar firming

Asian markets opened Monday, September 1, on a mixed note, reflecting investors’ cautious stance ahead of a week packed with global economic data and central bank commentary. While mainland Chinese equities gained ground, Japanese and South Korean indices slipped, underscoring regional divergence in sentiment. Currency markets also highlighted shifting dynamics, with the yen softening against peers while the Australian dollar inched higher.

China and Hong Kong: Modest Gains Reflect Policy Support

The SSE Composite Index advanced 0.37% to 3,857.93, extending a recent run of strength as investors bet on further Beijing-led policy support to stabilize growth. Sentiment in Hong Kong also improved slightly, with the Hang Seng adding 0.32% to close at 25,077.62. Market participants continue to monitor liquidity injections by the People’s Bank of China, as well as sector-specific easing measures, particularly in property and technology. These moves have provided some relief, though longer-term challenges, including weak exports and consumer demand, remain pressing.

Japan and South Korea: Indices Slide on Currency Pressures

The Nikkei 225 slipped 0.26% to 42,718.47, with exporters weighed down by a weaker yen that has struggled to maintain stability. The Japanese Yen Index dipped 0.11% to 68.00, a sign of continued currency headwinds for Tokyo’s markets. Similarly, South Korea’s KOSPI Composite Index declined 0.32% to 3,186.01, pressured by technology shares and a cautious stance from foreign investors. Both markets are navigating global supply chain challenges and the prospect of shifting U.S. trade policy, factors that could influence near-term volatility.

Australia: Currency Firms, Equities Ease

In Australia, the S&P/ASX 200 edged down 0.08% to 8,973.10, reflecting weakness in financials and mining shares. However, the Australian Dollar Index gained 0.18% to 65.39, supported by stronger commodity prices and renewed investor interest in risk assets. The divergence between equities and currency reflects investors’ uncertainty over whether domestic economic resilience can offset external headwinds, particularly slower demand from China, Australia’s largest trading partner.

India: Profit-Taking Caps Recent Gains

India’s S&P BSE SENSEX fell 0.34% to 79,809.65, snapping recent gains as traders engaged in profit-taking ahead of key corporate earnings reports. While India remains one of the region’s strongest-performing markets this year, valuations have grown stretched, and investors are increasingly sensitive to global cues. Currency stability and the trajectory of foreign institutional investment remain crucial watchpoints.

Outlook for the Week

With Asian markets starting the month on a mixed footing, investor attention is now turning to U.S. economic data, including labor market reports, as well as commentary from the Federal Reserve and other major central banks. Regional markets are also keeping a close eye on energy prices and geopolitical developments, particularly around U.S.–China trade tensions. The divergence in performance across Asia underscores how currencies, sector-specific pressures, and global policy shifts continue to shape the near-term outlook.