Asian equity trading was largely listless on Monday as holiday schedules across the region left volumes light and cross-border flows limited. A market holiday in China kept activity subdued, and both South Korea and Taiwan were closed for the day, constraining regional liquidity.
Markets in the region had already taken a cautious tone from U.S. trade, where a muted consumer inflation reading for January failed to resolve uncertainty around the near-term path for interest rates. U.S. exchanges were also shuttered on Monday for a holiday, further reducing global trading momentum.
Japan: GDP miss drags shares
Japanese equities were among the weaker performers, with the Nikkei 225 easing 0.2% and the TOPIX sliding 0.8% after the release of disappointing fourth-quarter gross domestic product data. Japan reported GDP growth of 0.2% year-on-year in Q4, significantly below consensus forecasts of 1.6%, and showed negligible recovery from a pronounced contraction in the third quarter.
The soft outcome reflected several demand-side headwinds, with weak business investment, muted export demand and subdued private consumption cited as the primary drags. The report noted that late-2025 stimulus measures from Tokyo provided little lift to economic momentum in the period under review.
Despite the headline weakness, broader declines in Japanese equity prices were limited by market speculation that Prime Minister Sanae Takaichi may step up fiscal stimulus measures to support the economy. The data also reduced the likelihood of additional Bank of Japan rate hikes, though the Q4 release indicated inflation remained persistent during the quarter.
Hong Kong: Index reshuffle supports select names
In holiday-thinned trading, Hong Kong’s Hang Seng index inched up 0.3%. The index’s gains were led by several stocks that were recently added in an index review. Metal miners CMOC Group Ltd (HK:3993) and Laopu Gold Co Ltd (HK:6181) were among the best performers, each advancing roughly 6% following their inclusion. Battery maker Contemporary Amperex Technology Co Ltd (HK:3750) also benefited from being added to the index, rising 2.5%.
Conversely, automobile retailer Zhongsheng Group Holdings Ltd (HK:0881) declined about 2% after its removal from the Hang Seng index.
Chinese mainland markets will remain closed for the full week for the Lunar New Year, and Hong Kong has scheduled closures from Tuesday through Thursday, further narrowing the universe of active trading in the region.
Other regional moves
- Australia’s ASX 200 recorded a modest increase of 0.2%.
- Singapore’s Straits Times index dipped 0.1% after data showed the city-state’s key non-oil exports for January were weaker than anticipated.
- Futures for India’s Nifty 50 fell 0.4%, leaving the index positioned for further downside following significant technology-sector losses driven by concerns about artificial intelligence-related disruptions to software companies. The Nifty had declined 1.3% on Friday amid those tech declines.
With multiple major markets closed for holidays and notable index rebalancings driving idiosyncratic moves in Hong Kong, trading in the region is expected to remain subdued for the near term. The combination of the tepid U.S. inflation read, thin liquidity and disappointing Japanese GDP presents a mixed backdrop for investors assessing market direction this week.