Asia-Pacific equities opened the week on a mostly positive note Monday, with investors cautiously positioning themselves ahead of fresh developments in U.S.-Ukraine discussions and closely monitoring central bank policy shifts. Gains across Japan, Hong Kong, and mainland China contrasted with losses in South Korea, while Australian and Singaporean markets offered mixed signals.

Japan, Hong Kong and China Lift Regional Sentiment

Japan’s Nikkei 225 advanced 0.65% to extend its winning streak, while the broader Topix index added 0.53%, supported by strong performances in technology and industrial shares. In Hong Kong, the Hang Seng Index inched up 0.19%, while the CSI 300 in mainland China gained 0.34%. Investors in both markets remained encouraged by recent government pledges to support economic stability and boost credit flows into property and manufacturing sectors.

South Korea’s Markets Under Pressure

In contrast, South Korea’s equity markets faced selling pressure. The Kospi index slid 1.25% and the small-cap Kosdaq dropped 1.52%, marking one of the sharpest declines in the region. Analysts attributed the pullback to heavy foreign outflows amid concerns about slowing semiconductor exports and weakening global demand for Korean technology goods. South Korea’s export growth, which accounts for nearly 40% of its GDP, has slowed for three consecutive months, adding to investor caution.

Australia Hits Milestone While Singapore Disappoints

Australia’s S&P/ASX 200 briefly touched an intra-day record high of 8,960 before trimming gains to finish up 0.14%. Mining and energy stocks provided a lift as iron ore prices stabilized, although financials lagged.

Singapore’s latest trade data dampened sentiment. Non-oil domestic exports fell 4.6% year-on-year in July, far worse than the 1.8% contraction forecast by economists in a Reuters poll. The decline came after a revised 12.9% surge in June, highlighting volatility in Singapore’s external trade and renewed pressure on electronics shipments, which make up over 30% of its export base.

Wall Street Influence and Global Backdrop

Asian investors also took cues from Wall Street’s performance. U.S. equity futures edged higher in Asia trading hours as hopes grew that the Federal Reserve could soon signal rate cuts after months of tightening. Last week, Wall Street enjoyed a strong rally before investors locked in profits on Friday.

The S&P 500 slipped 0.29% to 6,449.80, retreating from record highs. The Nasdaq Composite fell 0.40% to close at 21,622.98, while the Dow Jones Industrial Average outperformed, climbing 34.86 points—or 0.08%—to end at 44,946.12, boosted by a 12% surge in UnitedHealth shares.

Outlook

The mixed moves in Asia reflect both optimism and caution. On one hand, government stimulus measures in China and expectations of looser U.S. monetary policy provide tailwinds for risk assets. On the other hand, geopolitical uncertainty tied to U.S.-Ukraine talks and uneven trade data in key economies such as South Korea and Singapore continue to weigh on sentiment.

Investors are now looking ahead to economic releases later this week, including Japan’s GDP update, China’s industrial production figures, and U.S. inflation data—all of which could shape market direction for the rest of August.

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