The Year of the Dragon started with a bang as Hong Kong stocks soared, while markets in South Korea and the UK hit record highs. Hello everyone, while the A-share market was closed today, global markets went on an absolute tear. When our market reopens after the holiday, the probability of a strong opening seems very high indeed! Let's take a look at what happened in the markets today. Chinese assets surged dramatically. On January 2nd, Hong Kong stocks kicked off the year with substantial gains; the Hang Seng Index closed up 2.76%, and the Hang Seng Tech Index jumped 4%.
The semiconductor sector led the gains, with Hua Hong Semiconductor rising over 9% and SMIC climbing more than 5%.
Baidu surged 9.35% after its chip business filed for an IPO; AI chip designer Biren Technology saw its stock price double on its first day of trading.
The FTSE China A50 Index Futures rose nearly 1%.
The RMB exchange rate briefly strengthened beyond 6.97 against the US dollar. Global markets experienced a massive rally. Asian stocks rose 1.1%, marking their best "first-day-of-the-year performance" since 2012 (when the MSCI Asia Pacific Index gained 1.4% on January 3rd that year). Driven by a massive 7.2% surge in Samsung Electronics' share price, which itself hit a record high, South Korea's KOSPI index advanced 2.3%, breaking through the 4,300-point milestone for the first time and finally closing at 4,309.63 points.
Catalyzing the day's broader Asian tech rally, a Samsung Electronics co-CEO internally quoted a customer as saying "Samsung is back." The typically reserved co-CEO, Jeon Yong-hyun, made the remark in a New Year's memo to employees, fueling market anticipation that the Korean giant is close to securing a supply deal with NVIDIA. Having initially fallen behind SK Hynix in the crucial high-bandwidth memory (HBM) market, Samsung's stock began recovering and gaining strength towards the end of 2025, buoyed by firmer memory chip prices and bets that it would regain competitiveness with its next-generation HBM in 2026. "Our HBM4 demonstrates differentiated competitiveness," Jeon stated, adding, "Customers have even given us feedback like 'Samsung is back'." In a research note, Shinhan Securities strategist Lee Jaewon said optimistic corporate earnings expectations propelled Samsung Electronics and SK Hynix shares to record highs, providing strong support for the broader market. In other news, Singapore's economy grew 5.7% year-on-year in the fourth quarter, primarily driven by robust manufacturing growth. This pace was faster than the revised 4.3% expansion in the previous quarter. On Wednesday, Singapore's Prime Minister Lawrence Wong stated in a New Year message that the country's full-year 2025 economic growth reached 4.8%, exceeding expectations. Singapore's Straits Times Index also hit a record high on Friday, recently up 0.3%.
US stock index futures moved higher in pre-market trading: S&P 500 futures rose 0.47%, Nasdaq 100 futures gained 0.8%, and Dow Jones Industrial Average futures advanced 0.2%.
One analyst commented, "On the first trading day of 2026, AI was the most critical trading theme for Asian investors, and it will likely remain so all year. Companies like TSMC and Samsung are the 'sellers of shovels and pickaxes' for the AI industry; given the capital expenditure plans of US hyperscale cloud providers, these companies have high earnings visibility this year." In European markets, fueled by sustained optimism about economic growth, European stocks started the new year by hitting fresh all-time highs, with the UK's blue-chip FTSE 100 index breaking through the 10,000-point barrier for the first time.
That's the analysis for today. We can't wait for the markets to reopen!
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