Most Asian stocks rose on Monday with Chinese AI shares in the lead on growing optimism over the sector, although bigger advances were held back by growing geopolitical and macroeconomic risks.
Regional trading volumes were also subdued on account of a market holiday in Japan.
Tech shares were the best performers for the day, aided by Chinese AI gains and as the sector also tracked a Friday rally on Wall Street.
Softer-than-expected U.S. nonfarm payrolls data also lent some support, although near-term expectations for interest rates remained unchanged.
S&P 500 Futures fell 0.5% by 00:04 ET (05:04 GMT), after news of a U.S. government probe into the Federal Reserve, which Chair Jerome Powell claimed was politically motivated, sparked heightened concerns over the central bank’s independence.
Ongoing geopolitical strife across the globe– protests in Iran, the U.S. incursion in Venezuela, a China-Japan diplomatic spat, and the White House’s insistence on acquiring Greenland–also kept sentiment in check.
Asia tech advances; Chinese AI rallies
South Korea’s KOSPI was the best performer in the region, advancing 1.2% on gains in tech and chipmaking stocks.
Hong Kong’s Hang Seng added 0.8% on gains in tech, while the mainland China Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose between 0.5% and 1%.
In Hong Kong, shares of several AI firms that debuted in the past week rose sharply after strong debuts last week. Z.AI, listed as Knowledge Atlas Tech (HK:2513) and the first of China’s “AI tigers” to go public, surged 25% on Monday.
Peer MiniMax Group Inc (HK:0100), who also debuted last week, surged over 20%, while chipmaker Shanghai Iluvatar CoreX SemiCon Co (HK:9903) added nearly 3%.
Mainland-listed Cambricon Technologies Corp Ltd (SS:688256) added more than 3%.
Elsewhere, TSMC’s (NYSE:TSM) Taiwan shares (TW:2330) added 1.4%, after the world’s largest contract chipmaker posted strong year-on-year growth in its December sales on Friday.
TSMC’s print, coupled with NVIDIA’s (NASDAQ:NVDA) new chip unveiling and positive comments at the CES trade show last week helped lift sentiment towards AI stocks.
But the sector was still nursing deep losses through late-2025, as it was pressured by concerns over stretched valuations and circular investing in AI.
Asia stocks mark mixed start to 2026 amid tech rally, geopolitical jitters
Broader Asian stocks rose on Monday, but were nursing a mixed start to 2026. Heightened geopolitical tensions across the globe were a major headwind for risk-driven assets in the past week, offsetting an otherwise strong rally in tech.
South Korea’s KOSPI and Japan’s Nikkei 225 led gains in the first week of the year, while Chinese markets also logged gains. But indexes with smaller tech exposure lagged.
Singapore’s Straits Times index rose 0.7%, extending gains after the government flagged some changes to investments by sovereign wealth funds GIC and Temasek.
Australia’s ASX 200 rose 0.5%, with local miners tracking a rally in precious and base metal prices.
India’s Nifty 50 index lagged its peers, falling 0.5% amid growing uncertainty over more U.S. trade restrictions against New Delhi.
The U.S. incursion in Venezuela acted as a major risk-off event last week, as did an ongoing diplomatic spat between China and Japan, which saw Beijing outline some restrictions against Tokyo.
Fears of U.S. intervention in Iran and laggard progress towards a Russia-Ukraine ceasefire also kept geopolitical risks squarely in play.
Source: Investing