Asian markets ended Monday (24 August) on a broadly weak note, with most major regional equity benchmarks declining as investors adopted a cautious stance amid renewed geopolitical uncertainty, elevated energy prices and pressure from global bond markets. The trading session was characterised by risk reduction, particularly in technology and semiconductor stocks, while investors also remained focused on forthcoming US policy signals and the Federal Reserve’s Jackson Hole meeting later in the week. Australia was one of the notable exceptions, with its benchmark index managing to finish higher.
Japan’s Nikkei 225 ended at approximately 65,528, registering a decline of about 0.7 percent. The Japanese market came under pressure as investors remained concerned about higher global yields and weakness in technology-related shares. The market also continued to assess the impact of movements in the yen, international interest rates and the broader outlook for global economic growth. Despite the decline, the Japanese market remained relatively more resilient than some other major Asian markets.
South Korea was among the weakest performers in the region. The Kospi fell approximately 3.1 percent to around 6,697. Semiconductor and technology stocks were a major source of weakness, reflecting renewed concerns about valuations and the outlook for the global technology sector. The sharp decline in Seoul also contributed significantly to the negative tone across Asian equities.
Hong Kong equities also recorded a substantial decline. The Hang Seng Index fell about 1.8 percent to approximately 25,555. Investor sentiment was affected by weakness in major technology companies and concerns surrounding large capital-raising transactions in the Asian technology sector. The decline reflected a broader reduction in risk appetite rather than a single domestic trigger.
Mainland Chinese shares also finished lower, with the Shanghai Composite declining roughly 0.6 percent to around 3,882. Investors remained cautious about the strength of the Chinese economic recovery and the outlook for corporate earnings. Weakness in technology and growth-oriented shares added to the pressure, while expectations regarding further policy support remained an important consideration for investors.
Taiwan’s market also weakened, with the Taiex declining by approximately 1 percent. The technology-heavy nature of the Taiwanese market left it particularly sensitive to the sell-off in semiconductor and artificial-intelligence-related stocks across the region. Developments in global technology demand and the valuation of major chip companies remained important factors behind the movement.
Australia provided a contrast to the generally weaker regional trend. The S&P/ASX 200 gained approximately 0.5 percent to around 9,103. Strength in selected commodity and defensive stocks helped the Australian market outperform its Asian peers. The market nevertheless remained sensitive to movements in commodity prices, global interest rates and developments in China, which is a major trading partner for Australia.
India
India also experienced a cautious session, although the decline was considerably smaller than the losses seen in South Korea and Hong Kong. The Indian market initially opened higher, supported by buying in selected large-cap stocks and the decline in crude oil prices. However, the early gains gradually disappeared as the session progressed and investors became more cautious about geopolitical developments and the potential impact of new US sanctions against Iran.
"Indian indices ended lower on Monday, surrendering their early gains as escalating US-Iran tensions kept investors firmly on the defensive ahead of Washington's announcement of what it has described as its toughest-ever sanctions package against Tehran," says Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.
The Sensex closed at 77,369.11, down 172 points, or approximately 0.22 percent. The Nifty 50 ended at 24,219.05, lower by about 33 points, or 0.14 percent. The closing performance was relatively resilient compared with several other Asian markets, but the fact that the Indian indices surrendered their early gains indicated that investors remained unwilling to take aggressive positions.
Radhakrishnan added that today's session answered the question Friday left open. "The market tested the ceiling of its range once more and was rejected, confirming that this remains a sell-on-rise market rather than a buy-on-dip one," he said
Market breadth in India was moderately weak, with more sectors declining than advancing. Financial stocks remained under pressure, while information technology shares provided some support. Metal stocks were among the better performers, with the Nifty Metal index gaining strongly. Selected gold-related financial companies also benefited from higher gold prices. Some consumer and export-oriented stocks also attracted buying interest.
One of the main issues influencing Indian sentiment was crude oil. Oil prices remained elevated despite falling during Monday’s session. For India, which depends heavily on imported crude oil, sustained high energy prices can increase the import bill, place pressure on the rupee and contribute to inflationary concerns. Consequently, any further escalation in Middle Eastern tensions could remain a significant risk for Indian equities.
Geopolitical developments surrounding Iran remained at the centre of investor attention. Expectations of fresh US sanctions and the possibility of disruption to oil exports created uncertainty across global markets. Although crude prices eased during Monday’s trading, investors remained concerned that a worsening conflict could quickly reverse the decline and push energy prices higher again.
Global bond yields were another important factor. Higher yields can reduce the attractiveness of equities, particularly expensive growth and technology stocks, while also increasing financing costs for companies and governments. Asian technology shares therefore faced additional pressure as investors reassessed valuations and the likely path of US monetary policy.
The Indian rupee also remained relatively stable during the session, supported by intervention from the Reserve Bank of India. The rupee closed around 95.7450 against the US dollar. Stability in the currency provided some relief to Indian equities, although the outlook remains closely linked to crude oil prices, foreign portfolio flows and developments in the US dollar.
Outlook
Looking ahead, Asian markets are likely to remain sensitive to developments in the Middle East, the direction of crude oil prices, global bond yields and signals from US monetary policymakers. Investors will also be watching the Jackson Hole economic symposium for indications about the future path of US interest rates, while upcoming US inflation data could influence expectations for monetary policy.
For India, the immediate market picture remains one of cautious consolidation rather than a decisive breakdown. The Nifty’s ability to hold around the 24,200 area will be closely watched, while the 24,000 level remains an important psychological reference point. A sustained improvement in global sentiment, lower crude prices and stable currency conditions could provide support for Indian equities. Conversely, a renewed rise in oil prices or escalation of geopolitical tensions could increase selling pressure.
