Asian Markets Open New Year Higher as Tech Rally Lifts Sentiment, U.S. Futures and Oil Advance

BY COMFORT OGBONNA

Asian stock markets kicked off the new year on a positive note on Friday, with most benchmarks trading higher as investors returned from holidays encouraged by a strong rally in technology shares and renewed optimism around artificial intelligence-driven growth. Gains across the region were accompanied by advances in U.S. equity futures and a modest rise in oil prices, pointing to a broadly constructive start to global markets in 2026.

Hong Kong led the regional advance, with the Hang Seng Index surging 2.2% to 26,189.79, powered by heavy buying in major technology names. E-commerce heavyweight Alibaba climbed 3.2%, while search engine and tech conglomerate Baidu jumped 7.5% after announcing plans to spin off its artificial intelligence computer chip unit, Kunlunxin. Baidu said the unit is expected to list shares in Hong Kong in early 2027, subject to regulatory approvals, a move that investors welcomed as a potential value-unlocking step amid intensifying global competition in AI hardware.

Several major Asian markets remained closed for holidays, including those in Tokyo, Shanghai, Thailand, and New Zealand, thinning regional trading volumes. Elsewhere, South Korea’s Kospi rose 1.5% to 4,277.94, extending recent gains, while Australia’s S&P/ASX 200 edged 0.2% higher to 8,727.30. Taiwan’s Taiex added 1.1%, supported by chip-related stocks, and India’s Sensex posted a modest 0.1% gain.

Asian equities have continued to find support from expectations that rapid growth in artificial intelligence will drive sustained demand for semiconductors, data centers, and the broader infrastructure needed to support advanced computing. While recent manufacturing data across much of the region has been relatively soft, trade activity has shown resilience, helping to cushion concerns about slowing domestic demand.

“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,” said Shivaan Tandon of Capital Economics in a research note, highlighting the role of global tech investment in supporting regional growth.

In the United States, futures pointed to a stronger open, with contracts tied to the S&P 500 up 0.5% and those linked to the Dow Jones Industrial Average rising 0.3%. U.S. stocks ended 2025 on a weaker note, however, extending a late-year pullback despite delivering solid gains over the full year. On Wednesday, the S&P 500 fell 0.7% to 6,845.50, the Dow dropped 0.6% to 48,063.29, and the Nasdaq Composite slid 0.8% to 23,241.99.

Despite the late stumble, Wall Street wrapped up 2025 with impressive results. The S&P 500 notched 39 record highs during the year and finished up 16.4%. The Nasdaq surged 20.4%, while the Dow gained 13%, driven largely by investor enthusiasm for artificial intelligence and its potential to boost earnings across a wide range of industries.

Markets also navigated significant volatility during the year, including uncertainty surrounding trade policy. President Donald Trump eventually paused his on-again, off-again tariffs on imported goods worldwide while negotiating trade agreements, a move that helped soothe investor anxiety. Strong corporate profits and three interest rate cuts by the Federal Reserve further supported equity markets, and investors are now widely expecting the central bank to keep rates unchanged at its January meeting.

Economic data released late in the year offered mixed signals. The Labor Department reported that fewer Americans filed for unemployment benefits last week, suggesting layoffs remain low even as signs of a cooling labor market emerge.

All sectors in the S&P 500 finished lower in the final session of 2025, with technology stocks leading the decline. Western Digital fell 2.2% and Micron Technology dropped 2.5%, though both stocks were among the index’s top performers over the full year.

In commodities trading early Friday, silver rebounded sharply, jumping 3.5% after a steep 9.4% drop on Wednesday. The metal ended 2025 with a gain of more than 140%. Gold also edged higher, rising 1.1%, after closing out the year with a strong 63.7% advance. In energy markets, U.S. benchmark crude oil rose 35 cents to $57.77 per barrel, while Brent crude, the global benchmark, gained 35 cents to $61.20 per barrel.

In currency markets, the U.S. dollar strengthened slightly against the Japanese yen, rising to 156.80 yen from 156.75, while the euro edged up to $1.1760 from $1.1746, reflecting cautious optimism as global markets enter the new year.