Asian markets opened Monday’s morning session with a mixed tone, reflecting ongoing uncertainty around global demand, inflation dynamics, and monetary policy paths across the region. Investors are cautiously positioning ahead of key economic data releases later in the week, while currency stability helps limit broader volatility.

South Korea Leads Gains While Japan Shows Signs of Stabilization

South Korea’s KOSPI Composite Index advanced 1.39% to 4,067.21, emerging as one of the strongest performers in the region. The index benefited from continued inflows into semiconductor and technology shares, supported by expectations of a recovery in global chip demand heading into 2025. Market participants also reacted positively to signs that inflationary pressures in South Korea may be easing, potentially giving the central bank greater flexibility in its policy stance over the coming months.

Japan’s Nikkei 225 dipped marginally by 0.04% to 50,356.35, a mild pullback following last week’s strong momentum. Investors are closely watching the Bank of Japan as the yen remains historically weak despite slight improvement this morning. The Japanese Yen Index inched up 0.02% to 64.71, reflecting modest strengthening as traders assess the likelihood of future policy adjustments. While the yen’s levels continue to support exporters, they also add pressure to domestic consumers, creating a delicate balancing act for policymakers.

India and Australia Diverge as Domestic Factors Drive Sentiment

India’s S&P BSE SENSEX edged higher by 0.10% to 84,562.78, extending its long-running upward trajectory. Strong corporate earnings, continued resilience in domestic consumption, and robust foreign investment flows continue to underpin confidence. Investors are increasingly focused on India’s inflation readings and policy expectations ahead of the Reserve Bank of India’s upcoming assessment, though today’s early strength suggests optimism remains intact.

In contrast, Australia’s S&P/ASX 200 slipped 0.18% to 8,618.60, reflecting pressure on resource and energy stocks as commodity prices softened in overnight trading. The Australian Dollar Index rose slightly by 0.09% to 65.42, a sign of underlying stability supported by expectations that the Reserve Bank of Australia may maintain a tighter stance for longer. Nonetheless, equity performance remains sensitive to changes in global demand, particularly from China, which continues to shape sentiment in the Australian market.

China and Hong Kong Under Pressure as Growth Concerns Persist

Mainland Chinese equities extended their downward trend, with the SSE Composite Index falling 0.97% to 3,990.49. Investors continue to grapple with persistent concerns over China’s weak property sector, sluggish consumer activity, and uncertain policy support. Recent measures introduced by Beijing have yet to fully convince markets that a sustained recovery is underway, leaving sentiment fragile.

Hong Kong’s Hang Seng Index dropped sharply by 1.85% to 26,572.46, reflecting risk-off behavior among investors who remain wary of ongoing pressures in the region’s tech and real estate sectors. Elevated volatility continues to define Hong Kong markets, particularly as global investors reassess exposure to Chinese-linked assets. The decline reinforces broader caution surrounding the region, with traders seeking clearer signals on economic stabilization.

Looking ahead, Asian markets are expected to navigate a combination of domestic and global catalysts throughout the week. Key macroeconomic releases, monetary policy developments, and shifts in global commodity prices will likely influence investor sentiment. As the morning session progresses, market participants will be watching for signs of resilience in regional growth indicators, while remaining alert to risks stemming from China’s slowdown, geopolitical tensions, and upcoming central bank decisions across major economies.