Where Asia Closed Yesterday

Hong Kong led the region by a wide margin. The Hang Seng surged 2.52% to 26,038, its strongest single-session gain in weeks, as mainland-listed tech and property names drew fresh buying. The Shenzhen Component followed with a 1.63% advance to 15,591, while the Shanghai Composite added 0.43% to 4,075 — a more measured move that suggests the rally was concentrated in growth and small-cap names rather than state-backed heavyweights.

Singapore’s Straits Times Index climbed 1.18% to 5,097, catching a tailwind from the broader risk-on tone across Southeast Asia. Taiwan’s TAIEX rose 0.48% to 45,557, helped by steady demand for semiconductor exporters. India’s Nifty 50 gained 0.43% to 23,484 in a quiet session.

Japan was the notable laggard. The Nikkei 225 slipped 0.30% to 66,734, weighed by a yen that refused to weaken further — USD/JPY sat flat near 160, offering no fresh tailwind for exporters. South Korea’s KOSPI barely moved, up 0.15% to 8,801. New Zealand’s NZX 50 was the weakest board, dropping 0.79% to 13,066 as dairy and utilities names gave back recent gains.

US Overnight Snapshot

Wall Street handed Asia a cautious setup. The S&P 500 fell 0.74% and the Nasdaq Composite dropped 0.89%, with selling broadening into the close. Small caps bore the brunt — the Russell 2000 sank 1.37%, its worst session in over a week. The VIX ticked up to 16.1, a 1.84% rise that signals mild unease rather than panic.

Sector action was lopsided. Technology shed 1.00% and financials fell 1.15%, which will pressure HKEX-listed tech and bank names at the Asian open. Energy was the lone bright spot, rallying 1.29% on the back of a sharp oil move. The Fed’s Hammack added a hawkish note late in the session, warning that rates may need to rise if inflation does not abate — a comment that accelerated the afternoon sell-off in rate-sensitive sectors.

Commodity + FX Watch

Oil and copper sent opposite signals overnight. WTI crude jumped 1.91% to $95.60, extending a supply-driven rally that will benefit ASX energy names like Woodside and Santos while keeping inflationary pressure front of mind for central banks across the region. Copper fell 2.56% to $6.48, a sharp reversal that points to demand concerns and will weigh on ASX base-metal miners like BHP and South32 at the open.

Gold eased 0.53% to around $4,470 — a modest pullback that reflects the stronger-dollar tone rather than any shift in safe-haven demand. AUD/USD held steady at 0.717, up a marginal 0.14%, offering little directional read. USD/JPY sat flat near 160, keeping the yen weak enough to cushion Japanese exporters but not weak enough to trigger fresh intervention chatter from Tokyo.

What to Watch Today

• China-HK follow-through test. Monday’s 2.5% Hang Seng surge needs confirmation. If HKEX tech names open flat or lower despite strong Monday momentum, the rally was positioning-driven rather than conviction. Watch Alibaba and Tencent at the open for direction.
• Fed rate rhetoric ripple. Hammack’s warning that rates may need to rise will filter into Asian bond markets and rate-sensitive sectors. Australian REITs and Indian financials are the most exposed — any follow-up commentary from other Fed officials will amplify the move.
• ASX commodity split. Energy versus materials will be the cleanest trade on the ASX today. Oil’s 1.91% rally and copper’s 2.56% drop create a sector rotation setup that could define the session for Australia’s benchmark.
• Nikkei rebound potential. Japan underperformed on Monday while the rest of the region rallied. If the yen stays pinned near 160 and US futures stabilise during the Asian morning, the Nikkei may attract dip-buying from domestic institutions.

Bottom Line

The overnight US pullback complicates what was a strong start to the week across Asia. China and Hong Kong have the momentum, but Monday’s gains now face a headwind from Wall Street’s risk-off tone and hawkish Fed commentary. The session likely splits along regional lines — Greater China tests its follow-through, Japan looks for a bounce, and Australia trades the energy-versus-metals divergence. Luna3 sees a mixed open with a slight defensive lean across the broader region.

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