[MARKET ANALYSIS] Nikkei 225, KOSPI and Shanghai Comp. hit new ATHs while ASX 200 lags due to weakness in Financials

The performance of the Nikkei 225 and KOSPI hitting new all-time highs indicates strong regional sentiment, largely driven by political developments in Japan, while the ASX 200 underperforms due to weak financials, notably following disappointing JPMorgan earnings.

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  • Asia-Pac stocks trade mostly in the green, with the Nikkei 225 outperforming, while the ASX 200 lags.
  • ASX 200 initially started the session with gains and was up as much as 0.6% before reversing due to losses in Financials. This follows poor JPMorgan (JPM) earnings, in which EPS and revenue missed estimates.
  • Nikkei 225 is the clear outperformer in Asia-Pac equities, up 1.7% and continuing to extend to fresh ATHs. This follows increased traction around reports that PM Takaichi is set to dissolve the Lower House and call a snap election in a bid to capitalise on her healthy poll numbers, reviving the so-called ‘Takaichi trade’.
  • KOSPI trades choppily, with the South Korean equity market peaking at a new ATH of 4,716 before falling back into Tuesday’s trading range.
  • Hang Seng and Shanghai Composite started the APAC session on the front foot and have failed to pull back meaningfully in the first two hours of trade, with the Shanghai Composite trading at ATHs around 4,181.
  • US equity futures are trading in the opposite direction to their Asia-Pac counterparts, with ES and NQ both currently down 0.1%.
  • European equity futures are indicative of a slightly positive open, with the Euro Stoxx 50 future +0.1% after cash closed +0.2% on Friday.
Context

This divergence highlights varying investor confidence across the Asia-Pacific region, with implications for capital flows and sector rotations, particularly in financial and utility stocks.

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