Japanese and Hong Kong markets traded mostly higher on Monday as investors assessed China’s manufacturing and industrial profit data. The Nikkei 225 fell 0.14%, while the Topix added 0.68%. Shares of Japanese chip-related companies dropped as Chinese AI startup DeepSeek’s free open-source large-language model threatened US AI dominance. Advantest fell 8.2%, Tokyo Electron slipped 4.53%, and Renesas Electron fell 0.19%.
Hong Kong’s Hang Seng index rose 0.89% at the open, while the mainland CSI 300 added 0.28%. China’s factory activity growth in January unexpectedly contracted, with the official purchasing managers’ index coming in at 49.1, lower than Reuters’ estimates of 50.1. In December, China’s industrial profits jumped 11% from a year earlier.
The China Securities Regulatory Commission has introduced new initiatives to encourage the growth of index investment products in an attempt to support its struggling stock market. The move follows last Thursday’s measures to encourage large state-owned mutual funds and insurers to purchase more shares.
Hong Kong is expected to report trade data for December. The US markets closed lower on Friday, with the S&P 500 reversing course after hitting a fresh intraday record earlier in the session. The Nasdaq Composite slipped 0.5%, while the Dow Jones Industrial Average dropped 0.3%. Excitement towards President Trump’s pro-business policies has largely propelled risk assets higher last week as investors focused on his inauguration. The bull market is back in full force after December’s pullback.
