Asian stock markets made a bright start to 2026 on Friday, extending the momentum from a powerful global rally last year, although trading volumes remained light with Tokyo and Shanghai closed for public holidays.

Investor sentiment across the region was supported by optimism that the forces driving markets higher in 2025, cooling inflation, expected interest-rate cuts, and strong corporate earnings, will remain in place in the year ahead.

A global rally carries into the New Year

Global equities posted a standout performance in 2025. The S&P 500 gained 16.4%, the tech-heavy Nasdaq advanced 20.4%, and London’s FTSE 100 recorded its strongest annual gain in 16 years.

Asian markets were among the best performers last year. South Korea’s Kospi surged about 76%, driven largely by enthusiasm around artificial intelligence and semiconductor stocks. Hong Kong’s Hang Seng climbed roughly 28%, while Japan’s Nikkei 225 jumped more than 26%.

The question now facing investors is whether the rally can continue.

“Every new year brings the same question: will this momentum last?” said Kyle Rodda, senior market analyst at Capital.com. “The broad consensus is that it will.”

Rodda noted that markets are betting on stronger US economic growth, moderating inflation, and interest-rate cuts, alongside improving corporate fundamentals.

Hong Kong leads early gains

With several major exchanges shut, Hong Kong led regional gains, with the Hang Seng Index up 2.2% in early trading.

Technology stocks were a major driver after chip designer Biren Technologies surged around 80% following its initial public offering in Hong Kong. The Shanghai-based firm raised more than $700 million, highlighting continued investor appetite for companies linked to artificial intelligence.

“Biren benefits from scarcity value and strong market attention,” said Kenny Ng, a strategist at China Everbright Securities, adding that the AI sector remains in a rapid growth phase with significant long-term potential.

Search engine giant Baidu jumped nearly 7% after announcing that its AI chip unit, Kunlunxin, had filed for a Hong Kong listing.

Tech and AI Continue to dominate

Elsewhere in the region, markets in Taipei, Sydney, Jakarta, Manila, and Singapore also moved higher.

South Korea’s Kospi rose 1.7%, building on last year’s explosive gains. Samsung Electronics added about 3% after its co-chief executive said customers had praised the company’s high-bandwidth memory chips, with some reportedly saying that “Samsung is back.”

The continued strength of AI-related stocks suggests that investor enthusiasm for the sector remains intact as 2026 begins.

Commodities and Currencies edge higher

Precious metals also started the year on a firmer footing following recent volatility. Gold rose 0.64%, while silver gained 1.5%, after hitting record highs late last year.

In currency markets, the euro and pound edged higher against the US dollar, while oil prices also advanced, with Brent crude up 0.5% and US crude rising 0.6%.

Key Market Levels (around 04:30 GMT)

• Hong Kong – Hang Seng: +2.2% at 26,189.79
• Shanghai: Closed for holiday
• Tokyo: Closed for holiday
• Euro/Dollar: $1.1757
• Pound/Dollar: $1.3480
• Dollar/Yen: 156.84
• Brent Crude: $61.17 per barrel
• WTI Crude: $57.74 per barrel
• Dow Jones: -0.6% at 48,063.29 (previous close)
• FTSE 100: -0.1% at 9,931.38 (previous close)

As trading activity picks up across Asia in the coming sessions, investors will be watching whether Wall Street’s direction and AI-led momentum can continue to support markets after a remarkable year for global equities.