
Insight: Asian equities have had a strong year. Even just in the past week, benchmark indices in Hong Kong, Japan, and Korea chalked up sharp weekly gains — Hang Seng up 2.7%, Nikkei 2.3%, and KOSPI 4.8%. China's A-shares have crossed 4,000 points for the first time in a decade, and the market capitalization of Chinese technology stocks has surpassed that of financials for the first time, underscoring the structural shift towards innovation-led sectors. The latest upswing reflects optimism about the potential reopening of the U.S. government, alongside supportive U.S. policy pivots toward China, and a surge in AI-driven enthusiasm in the tech sector.
Impact: The increasing bullishness in Asia is more than a passing mood swing; it may mark the start of the structural change in global capital flows. Global investors, once wary of China’s slowing domestic growth and regulatory unpredictability, are now being drawn to resilient tech exports, solid corporate balance sheets, and the steep undervaluation of Asian equities compared to those on Wall Street. With the recent U.S. government shutdown highlighting Western regulatory risk, Asia stands out for both its insulation from Western volatility and exposure to long-term growth trends like energy transition and digital infrastructure. The region’s renewed momentum points to a broader rebalancing, as investors seek growth and resilience amid changing global dynamics.


