- China and Singapore led Asia higher yesterday while Japan, Korea, and Taiwan drifted lower — watch whether mainland momentum carries into Tuesday
- US overnight session was flat but oil surged 5% and gold hit fresh highs, setting up ASX energy and gold miners for a strong open
- VIX crept higher to 15.5 and US tech lagged — HKEX and TAIEX tech names may feel pressure at the bell
Where Asia Closed Yesterday
China was the standout. The Shanghai Composite climbed 1.02% to 3,940 and the Shenzhen Component jumped 1.42%, both extending a run that has pushed mainland indices to multi-month highs. Singapore’s Straits Times Index rode the same wave, adding 1.05% to close at 5,698 — its best session in over a week. Hong Kong’s Hang Seng gained 0.54% to 25,668, with property and consumer names doing the heavy lifting.
The rest of the region was less enthusiastic. Japan’s Nikkei 225 slipped 0.12% to 65,607, drifting on thin volume as exporters digested a weaker yen (USD/JPY pushing toward 159). South Korea’s KOSPI dropped 0.60% to 6,259, dragged lower by memory chip names giving back some of last week’s gains. Taiwan’s TAIEX fell 0.38% as TSMC and its supply chain cooled after a strong July. India’s Nifty 50 lost 0.27%, and Australia’s ASX 200 was effectively flat at -0.09%.
New Zealand’s NZX 50 bucked the trend with a 0.34% gain, catching up after the weekend.
US Overnight Snapshot
Wall Street delivered a whole lot of nothing on the headline indices — the S&P 500 dipped 0.06% and the Nasdaq Composite fell 0.32%. But under the surface, the rotation trade was loud. Energy stocks ripped 4.66% (XLE) on a crude oil surge, financials added 0.36%, and materials gained 0.61%. Technology was the laggard, with XLK down 0.88% as mega-cap semis and software gave back ground. Small caps (Russell 2000 -0.52%) underperformed, a sign that risk appetite was selective rather than broad.
The VIX ticked up 3.76% to 15.5 — not alarming, but enough to suggest traders are hedging into the week. For Asia, the Nasdaq weakness matters most: it sets a soft tone for HKEX-listed tech and TAIEX semiconductor names at the open. The energy strength, however, is a direct tailwind for ASX resource stocks.
Commodity + FX Watch
Oil was the overnight star. WTI crude surged 5.01% to $82.10, the sharpest single-session move in weeks. That feeds straight into ASX energy names like Woodside and Santos, and will support Southeast Asian oil exporters. Gold climbed 2.67% to around $4,460, extending its run toward all-time highs — a clear positive for ASX gold miners (Newmont, Northern Star) and a signal that macro hedging demand remains strong.
Copper added 0.97%, a modest tailwind for BHP and Rio Tinto but not enough to move the needle on its own. On FX, the Aussie dollar firmed 0.43% to 0.706 against the greenback, which may slightly compress AUD-denominated returns for offshore investors in the ASX. USD/JPY pushed higher to 159, keeping pressure on the Bank of Japan and offering a mild boost to Japanese exporters — though not enough to lift the Nikkei yesterday.
What to Watch Today
- China momentum test: Shanghai and Shenzhen both closed above round-number levels yesterday. Whether mainland buyers follow through on Tuesday will set the tone for Hong Kong and broader EM Asia sentiment.
- ASX energy and gold at the open: WTI +5% and gold +2.7% overnight is a potent combination for the resource-heavy ASX 200. Watch Woodside, Santos, Newmont, and Northern Star in the first hour.
- HKEX and TAIEX tech drag: Nasdaq -0.32% and XLK -0.88% will weigh on Asian tech at the open. Alibaba, Tencent, and TSMC are the names to watch for early direction — any strength there would signal local buyers are willing to diverge from the US tech session.
- USD/JPY at 159: The yen continues to weaken. Japanese exporters should benefit, but if USD/JPY pushes above 160 again, intervention noise from the Ministry of Finance will return and inject volatility into the Nikkei.
Bottom Line
The overnight setup is mixed but leans constructive for resource-heavy markets and China. ASX miners and energy names have a clear green light from commodity prices, and mainland China’s momentum from yesterday gives bulls something to work with. Tech-heavy boards in Hong Kong, Taiwan, and Korea face a softer open after US tech underperformed, but the broader macro backdrop — low VIX, strong commodities, stable credit — doesn’t suggest anything worse than a pause. Luna3 sees this as a selective risk-on session: follow the commodity signal and watch China for confirmation.
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