The first trading day of 2026 brought a wave of optimism across Asian financial markets, with major indices posting gains fueled by a rebound in US futures, rising oil prices, and a powerful rally in technology shares, particularly in Hong Kong.
Market Performances Across Asia
Hong Kong's Hang Seng index led the charge, surging by 2.2% to close at 26,189.79. The rally was significantly driven by heavyweight technology companies. South Korea's Kospi also posted a strong gain of 1.5%, finishing at 4,277.94. Australia's S&P/ASX 200 saw a modest increase of 0.2% to 8,727.30.
Taiwan's Taiex advanced by 1.1%, while India's benchmark Sensex added 0.1% to join the regional uptrend. Markets in Tokyo, Shanghai, Thailand, and New Zealand remained shut for extended New Year holidays.
AI Enthusiasm and Corporate Moves Fuel Gains
Chinese technology giants were standout performers. E-commerce major Alibaba saw its shares jump 3.2%. The session's highlight was Baidu, which rallied an impressive 7.5%. This surge followed the company's announcement of plans to spin off its artificial intelligence chip unit, Kunlunxin. The unit is slated for a listing on the Hong Kong stock exchange in early 2027, pending necessary regulatory approvals.
This performance underscores a broader theme supporting Asian equities: widespread optimism that the rapid adoption of artificial intelligence will continue to drive substantial demand for semiconductors, data centers, and related infrastructure.
Economic Resilience and Commodity Movements
Despite persistent weakness in regional manufacturing data, trade activity has shown notable resilience. "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," noted Shivaan Tandon, an emerging Asia economist at Capital Economics, in a report cited by the Associated Press.
In commodity markets, silver prices rebounded sharply by 3.5% in early Friday trade, recovering from a steep 9.4% plunge recorded on Wednesday. The metal had an extraordinary run in 2025, gaining over 140%. Gold also rose 1.1%, ending the previous year with a 63.7% gain.
Oil prices moved higher, with US benchmark crude adding 35 cents to $57.77 per barrel. The global benchmark, Brent crude, climbed by an equal margin to reach $61.20 per barrel.
Wall Street Context and Fed Outlook
The positive Asian sentiment tracked gains in US futures, where S&P 500 futures were up 0.5% and Dow Jones Industrial Average futures gained 0.3%. This followed a weaker end to 2025 on Wall Street, which marked a fourth consecutive session of losses. The S&P 500 fell 0.7%, the Dow slipped 0.6%, and the Nasdaq Composite dropped 0.8% in the final session of the year.
However, US markets registered robust annual gains for 2025. The S&P 500 rose 16.4%, setting 39 record highs during the year. The Nasdaq surged 20.4%, and the Dow ended 13% higher. The rally was powered by AI-driven enthusiasm, strong corporate earnings, and three interest rate cuts by the US Federal Reserve. Investors are now largely anticipating that the Fed will hold rates steady at its upcoming January policy meeting.
