Asian Markets Surge as Tech Stocks Drive Up Gains to Start 2026
Asian markets opened the new year on a positive note, with significant gains reported across the region on January 1, 2026. The Hong Kong’s Hang Seng index soared by 2.2%, reaching 26,189.79, primarily driven by a robust performance in technology stocks. E-commerce leader Alibaba saw an increase of 3.2%, while tech giant Baidu experienced a remarkable 7.5% rise following its announcement to spin off its artificial intelligence chip unit, Kunlunxin, which is set to list in Hong Kong in early 2027, pending regulatory approval.
Other Asian markets also reflected this optimism. South Korea’s Kospi gained 1.5% to close at 4,277.94, and Australia’s S&P/ASX 200 edged up 0.2% to 8,727.30. Taiwan’s Taiex rose by 1.1%, while India’s Sensex added 0.1%. Despite some markets, including those in Tokyo, Shanghai, Thailand, and New Zealand, remaining closed for the holiday, the overall sentiment was buoyed by expectations that the surge in artificial intelligence utilization will boost demand for essential components like computer chips.
According to Shivaan Tandon from Capital Economics, “Exports from most countries have surged in recent months, and we think the near-term outlook for Asia’s export-oriented manufacturing sectors remains favorable.” This positive outlook comes in spite of recent weaker manufacturing data across much of the region, with trade maintaining resilience.
In the United States, futures also indicated a favorable start to the year. The futures for the S&P 500 climbed 0.5%, while those for the Dow Jones Industrial Average increased by 0.3%. This follows a closing trend where U.S. stocks concluded 2025 with a fourth day of losses, despite a year marked by significant gains. The S&P 500 finished 0.7% lower at 6,845.50, while the Dow slipped 0.6% to 48,063.29. The Nasdaq composite also closed down 0.8% at 23,241.99.
Throughout 2025, the S&P 500 achieved 39 record highs and closed 16.4% higher for the year, while the Nasdaq and Dow recorded gains of 20.4% and 13%, respectively. These increases were largely fueled by investor enthusiasm surrounding artificial intelligence, which many believe will enhance profitability across various sectors.
Despite these gains, the market faced volatility, particularly related to trade policies under former President Donald Trump, who paused tariffs on imported goods as negotiations for trade deals continued. Strength in corporate profits and three interest rate cuts by the Federal Reserve also contributed to market stability. Analysts anticipate that the Fed will maintain steady interest rates at its upcoming meeting in January.
In labor market news, the U.S. Labor Department reported a decrease in unemployment benefit applications, indicating low layoffs despite signs of a weakening labor market. However, all sectors in the S&P 500 closed in the red on Wednesday, with technology stocks, including Western Digital and Micron Technology, facing declines of 2.2% and 2.5%, respectively.
As trading resumed in Asia, commodities also saw notable movements. Silver prices surged by 3.5% after a significant dip earlier in the week, maintaining a remarkable increase of over 140% in 2025. Gold rose by 1.1%, concluding the previous year with a 63.7% gain. In the oil market, U.S. benchmark crude gained 35 cents to reach $57.77 per barrel, while Brent crude rose by the same margin to settle at $61.20 per barrel. The U.S. dollar also experienced slight gains, trading at 156.80 Japanese yen and $1.1760 against the euro.
The positive momentum seen at the start of 2026 reflects the underlying trends in technology and global trade, suggesting a potentially fruitful year ahead for Asian markets and beyond.
