Hong Kong closed Friday on a high note with a 1.21% Hang Seng rally, but Monday’s US session delivered a tech-led pullback that could erase those gains at the Asian open — and with Nvidia earnings looming later this week, the region’s semiconductor heavyweights are squarely in the crosshairs.

Where Asia Closed Last Week

The Hang Seng was the standout performer heading into the weekend, climbing 1.21% to 26,009. Shenzhen’s Component index joined the rally at +0.87%, while the Shanghai Composite barely moved at +0.04% — a split that suggests tech and growth names drove the China bid rather than broad mainland enthusiasm.

South Korea’s KOSPI rose 0.88% and Taiwan’s TAIEX added 0.65%, both benefiting from the same chip-sector tailwinds that had been running through late last week. Singapore’s Straits Times Index ticked up 0.30%.

On the other side, Japan’s Nikkei 225 slipped 0.30% to 66,016, weighed down by a firmer yen backdrop earlier in the week. Australia’s ASX 200 lost 0.27% to close at 9,059, and New Zealand’s NZX 50 dropped 0.33% on Monday. India’s Nifty 50 was essentially flat at +0.08%.

The takeaway from Friday: risk appetite was concentrated in Greater China and the chip supply chain, while Japan and the commodity-linked markets lagged. Monday’s US action now tests whether that bid carries through.

US Overnight Snapshot

Wall Street started the week on the back foot. The S&P 500 fell 0.28% and the Nasdaq Composite dropped 0.76%, with the technology sector bearing the brunt — XLK slid 1.78% as traders positioned ahead of Nvidia’s earnings report due later this week. The Russell 2000 lost 0.66%, so the weakness wasn’t confined to mega-cap tech.

Financials bucked the trend, with XLF climbing 1.29% — Visa and Mastercard both hit fresh records on consumer spending strength. The VIX rose 4.76% to 15.9, elevated but still well below panic territory.

For Asia, the Nasdaq drag matters most. HKEX-listed tech names and TAIEX semiconductor stocks tend to gap in sympathy with US tech moves, and a nearly 2% XLK decline sets a cautious tone for those pockets at the open. The financials strength is a partial offset for Singapore and Australian banks.

Commodity + FX Watch

Gold surged 2.06% overnight, pushing toward record territory as risk-off flows and dollar dynamics converged. That’s a tailwind for ASX gold miners like Newmont and Northern Star — expect them to open firm.

WTI crude dropped 2.25% to $85.10 after Treasury Secretary Bessent’s sweeping Iran sanctions were read as a de-escalation signal rather than a supply threat. The oil decline will pressure ASX energy names and could weigh on the Straits Times Index, where energy carries meaningful weight.

Copper edged up 0.44%, a modest positive for BHP and Rio Tinto. AUD/USD rallied 0.73% to 0.717, which typically reflects improved risk sentiment toward China’s demand outlook — worth watching whether that holds through the Asia session. USD/JPY ticked up 0.12% to 159, keeping the weak-yen export tailwind intact for Japanese industrials despite the Nikkei’s recent softness.

What to Watch Today

• Nvidia earnings positioning: With results due Wednesday US time, every HKEX and TAIEX chip-adjacent name — TSMC, Samsung, SK Hynix, SMIC — will trade as a proxy for the AI capex narrative. Monday’s 1.78% XLK selloff suggests hedging is underway, so expect muted bids in Asia’s semiconductor space.
• Hong Kong momentum test: The Hang Seng’s 1.21% Friday rally meets a softer US tape. Whether Hang Seng holds above 26,000 on the open tells you if the mainland bid has legs or was purely a Friday squeeze.
• ASX gold vs. energy split: Gold miners should gap higher on the 2% gold rally, while energy stocks face pressure from the oil decline. Watch whether the net effect keeps the ASX 200 near flat or tips it lower — materials and energy are roughly equal weight in the index.
• Iran de-escalation read-through: Oil’s 2.25% drop on the Bessent sanctions headlines is being interpreted as reducing geopolitical risk premium. If that narrative holds, it removes a tail risk that had been supporting defensive positioning across Asia.

Bottom Line

The overnight setup is mixed-to-cautious for Asia. Tech faces a headwind from Wall Street’s pre-Nvidia positioning, and that puts Friday’s Hong Kong and Taiwan gains at risk. But the gold rally and firmer Aussie dollar point to pockets of strength, particularly in materials. The broader tone here at Luna3 reads as a sector rotation day rather than a broad risk-off event — financials and gold miners bid, tech and energy offered. Keep position sizes modest until Nvidia reports mid-week.

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