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StreetAccount Summary - Asian Market Recap: Nikkei (1.35%), Hang Seng (2.14%), Shanghai Composite +0.47% as of 03:10 ET

Mar 02 ,2026

• Synopsis:

  • Asia equities finished largely lower Monday following the missile and drone strikes on and by Iran. Japan benchmarks underperformed but closed away from their lows; some steep losses in Hong Kong with more losses for the internet & IT sectors. Mainland China and Taiwan a few points lower, Australia flat by the close; Singapore and the rest of Southeast Asia underperformed. South Korea closed for a holiday. US futures indicate a sharply lower open, Europe down in opening trades. US dollar much higher in afternoon trade, AUD pared early gains, yen and rupee weakening, onshore yuan weaker while offshore is flat. Treasury yields higher, JGB yields lower on haven bids. Brent and WTI oil futures up around 9% higher but are off their early morning highs; gold and silver also higher, base metals mixed. Cryptocurrencies turning negative.

  • Asia stocks lower from the bell Monday morning following Israeli and US attacks on Iran over the weekend and into Monday, and Tehran's response which saw it send missiles and drones into several Gulf States. The conflict now appears to be spreading with Hezbollah attacks on Israel and retaliatory strikes inside Lebanon, while a UK air base in Cyprus was also struck by a missile Risk assets lower across the region with crude oil contracts up 13% early on, the dollar DXY index up almost 1%, and gold also much higher but many of the initial sharp movements somewhat pared over the day as Trump appeared to offer an exit ramp by offering talks to Tehran's new leadership.

  • Stock performances diverged across sectors in response to the conflict: Qantas (QAN.AU), Singapore Airlines (C6L.SP), Cathay Pacific (293.HK) and SpiceJet (500285.IN) were among the Asia airlines to cancel flights to and through the middle east and underperformed their respective national markets. On the positive side, defense stocks including ST Technologies Engineering (S63.SP) and Mitsubishi Heavy Industries (7011.JP), oil traders including Mitsui & Co (8031.JP), energy companies such as Woodside Energy (WDS.AU) and CNOOC (883.HK), and container operators such as Evergreen Marine (2603.TT) among the outperformers.

  • In regional developments, S&PGlobal February PMIs showed output, new orders and employment improving almost everywhere although inflation remains elevated in several countries; Malaysia an exception with a modest contraction after several months of strong expansion. Separate data showed Indonesia inflation reached a three-year high in February. South Korea February exports beat expectations as chip shipments continued to grow. BOJ deputy governor Himino said interest rates are likely to move higher but gave no hint on the timing of the next hike.

  • The Tokyo Stock Exchange has approved the listing of Hino Motor's (7205.JP) and Mitsubishi Fuso holding company Archion on 1-Apr, with Hino delisting on 30-Mar. BYD (1211.HK) February vehicle sales declined at their fastest pace since the pandemic and for the sixth consecutive month although overseas shipments remained solid. Wuliangye Yibin (000858.CH) said its chairman had been placed under detention by local China authorities.

• Digest:

  • US and Israel begin military campaign against Iran, hints of de-escalation:

    • US and Israel began military campaign against Iran on Saturday, striking regime targets that resulted in deaths of Supreme Leader Khamanei and several high-level officials (Bloomberg). President Trump vowed strikes to continue, telling NY Times campaign will stretch for 4-5 weeks. Trump sounded optimistic about state of conflict, telling CNBC operations ahead of schedule and claimed Iranian officials in talks with US. Media sources later noted Iran's security chief Larijani reached out for fresh nuclear talks (which he later disputed).Trump also claimed he had three choices to lead Iran and was open to easing sanctions depending on their pragmatism. Still, it remains unclear whether Iran's temporary leadership will agree to core demands on uranium enrichment and missiles. Iran continues to retaliate with attacks against Israel and Gulf states, resulting in shutdown of major airports (Axios, Reuters). Lebanon also drawn into conflict with Israel retaliating against Hezbollah missiles (Reuters). With Strait of Hormuz shipping disrupted (Bloomberg, NY Times), OPEC+ agreed to resume unwinding of 1.65M bpd of production cuts with increase of 206K bpd from April (vs 137K bpd increment in December).

  • Iran conflict means an unpredictable period for oil prices:

    • Oil rallying in Asian trade Monday as joint US-Israeli action against Iran disrupts shipping through Strait of Hormuz, which facilities ~20% of global oil and gas volumes (Bloomberg, NY Times). While there has been no formal closure of the Strait, tanker traffic has slowed sharply amid the uncertainty and insurance premiums have spiked (FT). Beyond knee-jerk reaction to headlines, analysts argue ultimate impact on oil prices hinges largely on variables such as length of shipping disruption, number of barrels affected and potential replacement supply. Trump gave war timeline of a few weeks though US considered unlikely to tolerate a prolonged conflict that spikes energy prices in an election year. Sunday's OPEC+ production increase was considered marginal relative to at-risk barrels and extra output is still subject to Hormuz transit disruption. There are questions about how long existing buffers can cushion the impact. Gulf countries had been surging crude loadings in recent weeks (Bloomberg). US and other countries can also tap existing reserves. JP Morgan estimated Gulf producers have around 25 days before storage capacity is exhausted and are forced to shut in production. Red Sea pipelines also allow for partial diversion of crude flows

  • China and Russia say US-Israeli attacks on Iran unacceptable:

    • Chinese Foreign Minister Wang Yi held a phone call Sunday with Russian counterpart Sergei Lavrov at the latter's request (Xinhua). Both countries initiated the UN Security Council emergency meeting Saturday. Wang said it is unacceptable for US and Israel to launch strikes on Iran while negotiations were ongoing, or for the blatant killing of a head of state and incite regime change. These actions violate international law and basic norms of international relations. Stressed that China is highly concerned with the escalation spreading throughout the Persian Gulf which may push the Middle East into a dangerous abyss. Outlined China's stance demanding: (1) immediate cessation of military operations, (2) prompt return to dialogue, and (3) international solidarity against unilateral actions. Lavrov said Russia shares the same position with China and stands ready to strengthen coordination and communication with the Chinese side to send a clear signal through platforms such as the UN and the Shanghai Cooperation Organization, calling for an immediate cessation of the war and a return to diplomatic negotiations. Local media commentaries echoed condemnation of the use of force though there were no hints as yet of a potential response (Xinhua, Global Times).

  • Hang Seng Tech extends losses in bear market:

    • Hang Seng Tech briefly dropped below 5,000 on Monday morning, first time since April. Came after index plunged more than 10% in February, worst in more than two years. Index now deep in bear market, having fallen 25% from 2-Oct high. Bloomberg noted sentiment toward China's internet companies hit low point as concerns over valuations and growing competition squeeze profits. Added mainland China investors have been accelerating exit from Hong Kong-listed shares on earnings frustration (Bloomberg) with Baidu (9888.HK) kicking off December-quarter earnings with drop in both revenue and net profit as investors question whether AI investments are translating into meaningful growth driver quickly enough. Moreover, investors increasingly turn to raft of new listings by Chinese chipmakers and AI startups for pure AI plays. In addition, more funds rotating from Hong Kong to South Korea, Japan and Taiwan markets (Yicai). Still some analysts said Hang Seng Tech now offers significant allocation value after deep correction as A-H premium now hitting near record high and P/E ratio for some internet giants retreating to low teens, implying narrative that almost entirely excludes expectations of AI business growth.

  • BOJ Deputy Governor Himino advocates gradual rate hikes:

    • In a largely academic speech, BOJ Deputy Governor Himino discussed recent policy developments. Recalled fears of a demand side shock triggered by Trump tariffs turned out to be more moderate than initially expected and credited the US economy's surprising resilience rather than changes in trade policies. Mentioned Japan's output gap at around zero as one indication of the absence of overheating. While there are bottlenecks under stress such as labor supply, this has yet to spill over into any of the major consumer confidence surveys. Turning to inflation, acknowledged that higher food costs are an increasing burden on households. This led into the crux of the debate that such challenges are caused by supply side factors (arguing that if it were demand driven, there would be more breadth in inflation outside of non-fresh food). Suggested that responding to supply shocks is more difficult than those from demand as the former can happen in periods without strong economic growth, and taking action could disrupt recovery dynamics. Then discussed measures of underlying inflation that can be derived from two approaches -- by smoothing out volatile or temporary shocks or one based on inflation expectations. Said the gap between underlying inflation and the price stability target is slightly negative but will approach zero going forward. While BOJ policy remains somewhat accommodative, it should gradually shift to a more neutral stance through moderate policy rate hikes. Himino also joined the chorus of board members playing down the feasibility of pinning down the neutral rate and using that as the north star, instead endorsing a holistic and real-time assessment.

  • Notable Gainers:

    • +19.7% 688297.CH (Avic (Chengdu) UAS): reports preliminary FY results; net income attributable CNY88.6M vs guidance CNY80.0-95.0M and year-ago (CNY53.9M)

    • +10.0% 600938.CH (CNOOC): oil rallying as joint US-Israeli action against Iran disrupts shipping through Strait of Hormuz

    • +5.8% 9107.JP (Kawasaki Kisen Kaisha): marine transportation companies trading higher, reportedly driven by route changes to avoid Persian Gulf and expectations of higher freight rates

    • +3.9% 2432.JP (DeNA Co.): to launch up-to-¥50.0B buyback, to run from 2-Mar through 26-Feb-27

    • +3.6% 7011.JP (Mitsubishi Heavy Industries): aerospace & defense generally higher following joint US-Israeli action against Iran

  • Notable Decliners:

    • -8.3% 1055.HK (China Southern Airlines): airlines trading lower following joint US-Israeli action against Iran

    • -7.3% 4666.JP (Park24): reports Q1 results

    • -5.6% 8337.JP (The Chiba Kogyo Bank): banking sector reportedly trading lower following collapse of UK lender MFS

    • -2.8% 7974.JP (Nintendo): confirms secondary offering of its shares by holders and buyback

    • -0.7% C07.SP (Jardine Cycle & Carriage): reports FY underlying NPAT $1.11B vs FactSet $1.04B

• Data:

  • Economic:

    • Japan

      • February final manufacturing PMI 53.0 vs flash 52.8 and 51.5 in prior month

    • Australia

      • Q4 business inventories (0.1%) vs consensus 0.0% and (0.9%) in Q3

        • Q4 company profits +5.8% vs consensus +1.9% and revised +1.5% in Q3

      • February ANZ-Indeed job advertisements +3.2% m/m vs revised +5.2% in January

    • South Korea

      • February trade balance $15.5B vs FactSet consensus $11.4B and $8.7B in prior month

        • Exports +29.0% y/y vs FactSet consensus +25.0% and revised +33.8% in prior month

        • Imports +7.5% y/y vs FactSet consensus +12.4% and revised +11.6% in prior month

  • Markets:

    • Nikkei: (793.03) or (1.35%) to 58057.24

    • Hang Seng: (570.69) or (2.14%) to 26059.85

    • Shanghai Composite: 19.71 or +0.47% to 4182.59

    • Shenzhen Composite: (18.72) or (0.68%) to 2744.86

    • ASX200: 2.30 or +0.03% to 9200.90

    • KOSPI: Closed

    • SENSEX: (1,570.20) or (1.93%) to 79716.99

  • Currencies:

    • $-¥: +1.03 or +0.66% to 157.0880

    • $-KRW: +20.09 or +1.40% to 1459.9900

    • A$-$: (0.01) or (0.83%) to 0.7057

    • $-INR: +0.39 or +0.42% to 91.4563

    • $-CNY: +0.03 or +0.36% to 6.8832