Asian stock markets broadly advanced on Monday as traders digested a tech-led recovery on Wall Street at the end of last week and reacted to clearer political direction in Japan. The surge in risk appetite came alongside modest gains in U.S. stock index futures during Asian trading hours.
Japan’s equity market was the standout mover. The Nikkei 225 climbed as much as 5.6% to a new record of 57,337.07, propelled by the ruling coalition’s decisive victory in Sunday’s lower-house election that bolsters Prime Minister Sanae Takaichi’s mandate. The broader TOPIX index also rose to a record, gaining 3.4% to 3,825.67 points.
"The coalition's win will give Takaichi more freedom in policy decisions and strengthen her ability to pursue economic and foreign policy goals," ING analysts said in a note.
Market commentary and pricing imply expectations for a policy push from the new government - including higher public spending, tax incentives and steps to lift wages and corporate investment - along with continued backing for strategic areas such as technology, defense and energy. ING analysts also cautioned that the outcome is likely to have mixed effects across asset classes, saying,
"Today's election results will likely boost local equities but weigh on Japanese government bonds and the yen," ING analysts added.
Regional technology sectors gained ground as investors cheered renewed momentum in U.S. chipmakers and AI-linked names following last week’s volatility tied to artificial intelligence disruption concerns. South Korea’s KOSPI surged nearly 5% after steep losses over the prior two trading days.
Among individual movers, Samsung Electronics (KS:005930) shares rose more than 5% after reports that the company will start mass production of its next-generation HBM4 memory chips later this month. Rival SK Hynix (KS:000660) also jumped over 5%.
Elsewhere in Asia, Hong Kong’s Hang Seng climbed about 2%, with the Hang Seng TECH subindex up 1.5%. Mainland China saw gains as the blue-chip Shanghai Shenzhen CSI 300 index and the Shanghai Composite each advanced about 1.3%.
Other regional benchmarks moved higher as well: Australia’s S&P/ASX 200 increased roughly 2%, and Singapore’s Straits Times Index gained about 1%. Futures tied to India’s Nifty 50 edged up around 0.1% as investors weighed details of the U.S.-India trade framework.
Investors are also looking ahead to delayed U.S. jobs and inflation data due later in the week for further guidance on the trajectory of interest rates and global growth. While the rebound on Wall Street provided a lift to markets in Asia, participants remained cautious after sharp swings last week driven by technology stock volatility and rapidly changing expectations around AI.
Market context: The moves reflect a combination of renewed risk-on positioning after U.S. tech stocks recovered some of their recent losses and the removal of political uncertainty in Japan following Sunday’s lower-house election. Technology, semiconductors and broader equity sectors were the primary beneficiaries of the early-week rally.