Asian markets opened Thursday with a cautious and fragmented tone, reflecting a blend of selective risk-taking, currency-driven adjustments, and seasonal liquidity constraints. With the region still digesting global macro signals and local market-specific factors, early trading shows investors positioning rather than committing to broad directional bets.

India and China Lead Modest Equity Gains

Indian equities set a constructive tone for the region, with the S&P BSE Sensex rising 0.60% to 82,344.68 during the morning session. The advance reflects continued domestic optimism around economic resilience, steady corporate earnings expectations, and sustained retail participation. Indian markets have increasingly decoupled from short-term global volatility, drawing support from infrastructure spending momentum and stable capital inflows.

Mainland China also contributed to the positive side of the ledger, as the SSE Composite Index edged up 0.27% to 4,151.24. The move suggests cautious stabilization following recent policy signaling aimed at supporting growth and improving market confidence. While gains remain measured, investors appear increasingly willing to reengage selectively, particularly in sectors tied to domestic consumption and industrial upgrades.

Japan and Hong Kong Signal Caution as Currency Pressures Mount

Japanese equities were marginally higher, with the Nikkei 225 up 0.13% at 53,428.62, but the underlying tone remained fragile. The Japanese yen index slid sharply by 0.75% to 65.19, highlighting renewed currency weakness that continues to shape equity market dynamics. While a weaker yen typically supports exporters, rapid depreciation raises concerns over imported inflation and financial stability, keeping investors guarded.

Hong Kong’s Hang Seng Index was flat at 27,826.91, reflecting a wait-and-see stance ahead of clearer signals on regional growth and capital flows. With Chinese markets partially active and regional liquidity thinning ahead of holiday closures, Hong Kong traders appeared reluctant to push valuations meaningfully higher in early hours.

Australia, Korea Retreat Amid Risk Rebalancing

In contrast, markets in Australia and South Korea moved lower. The S&P/ASX 200 fell 0.81% to 8,861.10, underperforming regional peers as investors reassessed exposure to rate-sensitive sectors and commodities. Despite a 0.33% rise in the Australian Dollar Index to 70.33, equity sentiment remained cautious, suggesting currency strength alone was insufficient to offset concerns around global demand and valuation pressures.

South Korea’s KOSPI Composite Index declined 0.37% to 5,151.66, extending recent consolidation. The pullback reflects profit-taking in technology-heavy names and sensitivity to global semiconductor cycle expectations. As a bellwether for global tech supply chains, Korea’s early weakness underscores lingering uncertainty around demand normalization.

Regional Liquidity Thins as Lunar New Year Approaches

Seasonal factors are also shaping Thursday’s session. Several Asian markets are operating with reduced participation ahead of Lunar New Year holidays, and Malaysia’s Kuala Lumpur Stock Exchange is closed for Chinese New Year. The absence of Malaysian trading, alongside lighter volumes elsewhere, is contributing to uneven price action and exaggerated moves in currencies and select equity segments.

Market Outlook: What Investors Are Watching Next

Looking ahead, investors will remain focused on currency stability, particularly in Japan, and on whether early gains in India and China can attract broader regional participation. Reduced liquidity during the holiday period raises the risk of short-term volatility, while upcoming global macro data and central bank commentary could quickly shift sentiment. For Israeli and global investors, the key opportunity lies in identifying markets with strong domestic fundamentals that can weather external noise, while the primary risk remains abrupt currency moves that could unsettle equity valuations across Asia.