Asian Markets Open 2026 with Record-Breaking Rally on Regional Strength, AI Optimism
Asian equities have kicked off 2026 with their strongest start on record, outpacing the United States as investors shift capital toward the region’s tech sector, currencies, and corporate bonds amid attractive valuations and AI-driven growth prospects.
The MSCI Asia Pacific Index has surged roughly 4% in the first four trading sessions of the year—its best opening performance in data going back to 1988. South Korea and Taiwan have led the advance, while a gauge of regional currencies is also posting its strongest early-year rally since 2023.
“U.S. exceptionalism has peaked and is starting to unwind,” said Raymond Sagayam, managing partner at Banque Pictet & Cie SA. He pointed to multiple tailwinds for Asian emerging markets, including compelling valuations and their strategic position within the artificial intelligence value chain.
The rally reflects growing appetite among global investors for Asian assets, especially as U.S. tech valuations appear stretched and the dollar shows signs of softening. Tech-heavy benchmarks have been standout performers: South Korea’s Kospi Index has jumped 7.4% this year, and Taiwan’s Taiex Index has climbed 5.6%, both reaching all-time highs.
Chinese stocks have also risen to a four-year peak, fueled by optimism around the country’s AI advancements and emerging signals of an economic rebound.
“We are only halfway through the AI capex super cycle and associated productivity boom,” said Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore. He emphasized that companies across Asia’s AI supply chain remain inexpensive relative to global peers.
The broad-based strength extends beyond equities. Regional currencies have appreciated, and U.S. dollar-denominated corporate bonds from Asian issuers have rallied, underscoring a synchronized upswin in regional risk assets.
With AI investment still in its middle innings and regional markets offering comparatively attractive entry points, Asia’s record-breaking start to 2026 suggests the momentum may have room to run as capital continues to rotate into the region.
The above content was completed with the assistance of AI and has been reviewed by an editor.
