Shares are higher in Asia in an upbeat start to the new year

Asian Markets Start New Year with Strong Tech Rally, US Futures Advance

Asian markets kicked off 2026 with notable gains on Friday, led by a robust performance in the technology sector, while U.S. futures and oil prices also moved higher.

The Hong Kong Hang Seng Index surged 2.2% to 26,189.79, with tech stocks driving much of the momentum. Chinese e-commerce giant Alibaba climbed 3.2%, while Baidu jumped 7.5% after announcing plans to spin off its artificial intelligence chip unit Kunlunxin. The company intends to list this division on the Hong Kong stock exchange by early 2027, pending regulatory approvals.

Several Asian markets remained closed for the New Year holiday, including Tokyo, Shanghai, Thailand, and New Zealand, but those that were trading showed positive momentum. South Korea’s Kospi advanced 1.5% to 4,277.94, while Australia’s S&P/ASX 200 edged up 0.2% to 8,727.30. Taiwan’s Taiex rose 1.1%, and India’s Sensex added a modest 0.1%.

The regional strength reflects ongoing optimism about artificial intelligence driving demand for semiconductors and data center infrastructure. Shivaan Tandon of Capital Economics noted in a recent report that despite relatively weak manufacturing data across much of Asia, exports have surged in recent months. “We think the near-term outlook for Asia’s export-oriented manufacturing sectors remains favorable,” Tandon wrote.

U.S. markets are poised to open higher after the holiday break, with S&P 500 futures up 0.5% and Dow Jones Industrial Average futures adding 0.3%. This follows a four-day losing streak that closed out 2025, despite the year’s strong overall performance.

The S&P 500 finished 2025 with an impressive 16.4% annual gain, setting 39 record highs throughout the year. The tech-heavy Nasdaq outperformed with a 20.4% increase, while the Dow Jones Industrial Average rose 13%. These gains came as investors embraced artificial intelligence technologies and their potential to boost corporate profits across multiple sectors.

The market journey wasn’t without turbulence, however. Political uncertainty surrounding trade policy created volatility, though President Donald Trump eventually paused his threatened tariffs on imported goods while pursuing trade negotiations. Strong corporate profits and three interest rate cuts by the Federal Reserve also contributed to the market’s upward trajectory.

Looking ahead, investors widely expect the Federal Reserve to hold interest rates steady at its upcoming January meeting. Recent economic data showed a resilient job market, with the Labor Department reporting that fewer Americans applied for unemployment benefits last week, even amid a gradually weakening labor market.

In the final trading session of 2025, all S&P 500 sectors closed in negative territory, with technology stocks experiencing the steepest declines. Western Digital fell 2.2% and Micron Technology dropped 2.5%, despite both companies ranking among the index’s top performers for the year.

In commodities markets, precious metals rebounded in early Friday trading. Silver jumped 3.5%, recovering partially from Wednesday’s 9.4% decline. The metal recorded a remarkable 140% gain for 2025. Gold added 1.1%, capping a year that saw it surge 63.7%.

Oil markets also began the new year on positive footing. U.S. benchmark crude gained 35 cents to $57.77 per barrel, while Brent crude, the international standard, rose by the same amount to $61.20 per barrel.

In currency trading, the U.S. dollar edged up to 156.80 Japanese yen from 156.75 yen. The euro strengthened slightly to $1.1760 from $1.1746.