Asian markets opened Wednesday, November 5, on a weak footing as risk sentiment faded across the region. Investors digested a mix of global economic cues, ranging from U.S. policy signals to earnings results in Asia, while monitoring fresh concerns about slowing growth momentum. The morning session was marked by declines across major indices, with Japan and South Korea facing the heaviest losses.

Japan and South Korea Lead Losses

Japan’s Nikkei 225 tumbled 2.45% to 50,233.74, extending a multi-session decline driven by weakness in technology and export-oriented stocks. The Japanese yen, however, showed some resilience, rising 0.38% to 65.08 on the index, as investors sought safe-haven assets amid growing volatility. Analysts pointed to renewed worries about global demand and the yen’s strength weighing on corporate earnings as key drivers of the selloff.

In South Korea, the KOSPI Composite Index dropped sharply by 4.03% to 3,955.54, marking one of its steepest morning losses in months. Tech-heavy names and semiconductor stocks bore the brunt of the decline following a pullback in U.S. chip stocks overnight. Institutional investors were seen trimming positions amid concerns that global supply chain and demand pressures could persist into the final quarter of the year.

China and Hong Kong Face Persistent Headwinds

Mainland Chinese equities were also under pressure, with the SSE Composite Index down 0.41% at 3,960.19. Investor sentiment remained muted despite government pledges to stimulate domestic consumption and support the property sector. Weak manufacturing data and lackluster credit growth have reinforced concerns about China’s economic rebound losing momentum heading into year-end.

Hong Kong’s Hang Seng Index slipped 0.79% to 25,952.40, weighed down by declines in technology and property shares. The index’s recent gains proved short-lived as traders took profits amid a cautious outlook for corporate earnings. Analysts noted that international funds remain hesitant to increase exposure to Hong Kong due to persistent geopolitical and macroeconomic uncertainties.

Australia and Regional Currencies Weaken

Australia’s S&P/ASX 200 edged down 0.33% to 8,784.50, with losses concentrated in energy and mining stocks following weaker commodity prices. The Australian dollar fell 0.69% to 64.91, reflecting ongoing concern that global growth headwinds could pressure the resource-dependent economy. Domestic traders are also awaiting fresh commentary from the Reserve Bank of Australia on inflation and interest rate direction later this week.

The region’s broader currency markets showed a mixed tone. While the yen’s modest rise suggested safe-haven positioning, weakness in other regional currencies pointed to ongoing investor caution. Foreign exchange volatility is expected to remain elevated as traders balance diverging monetary policies and shifting expectations for U.S. interest rates.

India and Sri Lanka Markets Closed

Trading volume across Asia was lighter than usual, with India’s National Stock Exchange closed for Guru Nanak Jayanti and Sri Lanka’s Colombo Stock Exchange closed for Ill Full Moon Poya Day. The holiday closures reduced overall liquidity in regional markets, amplifying intraday price swings in open exchanges.

Outlook: Investors Eye Policy Signals and Earnings Guidance

Looking ahead, regional investors are expected to monitor upcoming central bank communications and key economic data releases from China, Japan, and the United States. Market participants are particularly focused on the trajectory of inflation and its potential impact on monetary policy across Asia-Pacific economies. Volatility may persist as traders adjust their portfolios to shifting interest rate expectations and geopolitical risks.

While today’s downturn underscores investor caution, analysts note that lower valuations could create selective buying opportunities if macro conditions stabilize. For now, the near-term direction of Asian markets will hinge on global growth signals, policy clarity, and investor confidence returning to risk assets.