The majority of the Asian stocks remained muted on Monday due to a market holiday in China and the fall of Japanese shares due to disappointing GDP growth
The majority of Asian stocks were on a tight range on Monday as the trading volume was low due to a market holiday in China, and Japanese shares also fell due to murky fourth-quarter economic growth data. Taiwanese and South Korean markets were also closed for the day.
On the other hand, the regional markets slightly took a lead from Wall Street, as the mild consumer inflation data for January could not give clarity about the interest rates. The US markets are also closed on Monday due to a holiday.
Japanese Shares Dip on Weak Q4
Japan’s Nikkei 225 index dropped by 0.2% while the TOPIX index plunged by 0.8% after the GDP data for the fourth quarter showed slow growth, contrary to the wide expectations.
The GDP in Japan grew by 0.2% year-on-year in the fourth quarter, much lower than the expectations of 1.6%. The print also indicates a slight improvement in growth after a sharp decrease in the third quarter.
The weak print was primarily attributed to weak business spending, decreasing export demand, and warm private consumption. Moreover, the late 2025 stimulus from Tokyo could not support the growth as well.
However, these broader losses in Japanese shares were decreased by bets that Prime Minister Sanae Takaichi will increase Tokyo’s government spending measures.
The signs of a weakening Japanese economy also eliminated the outlook for an increase in the interest rates by the Bank of Japan, though Monday’s inflation data reveals that inflation is sticky in Q4.
Hong Kong Edges Higher
The Hang Seng Index in Hong Kong was up 0.30% on lighter trading volume. CMOC Group Limited (HK:3993) and Laopu Gold Corporation Limited (HK:6181), both metal miners, performed well, each rising approximately 6.0%, following their inclusion on the Hang Seng Index during a recent review of constituent stocks.
Likewise, battery manufacturer Contemporary Amperex Technology Co. Ltd. (HK:3750) gained 2.50% after being added to the Index. Conversely, automotive retailer Zhongsheng Group Holdings Limited (HK:0881) fell 2.0% as it was removed from the Index. Both the Chinese stock markets were closed for the entire week due to the Lunar New Year holiday while Hong Kong market will be closed from Tuesday to Thursday.
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Other Asian regional markets included a 0.20% increase in Australia’s ASX 200 and a 0.10% decrease in Singapore’s Straits Times Index, reflecting weaker-than-anticipated January non-oil export results.
In addition, futures for the Nifty 50 index in India declined by 0.40% this week, as heightened fears of disruptions related to AI technology hit local software companies and projected continued Nifty losses. The Nifty declined 1.30% last Friday.
