Asia markets mixed amid geopolitical tensions

January 07, 2026 (MLN): Asian markets began the trading session on a mixed note as investors digested escalating geopolitical developments alongside regional economic data, while defense stocks reversed recent gains and select automakers rallied sharply.

In Japan, the Nikkei 225 opened lower and later slid 0.45%, while the broader Topix declined 0.63%, weighed down by losses in defense-related shares.

Kawasaki Heavy Industries dropped 1.1% as sentiment toward the sector weakened after two days of gains, according to CNBC.

South Korean markets showed divergence at the open. The benchmark Kospi jumped 1.89%, supported by strong buying in heavyweight stocks, while the small-cap Kosdaq edged 0.12% lower.

Defense names traded under pressure, with Korea Aerospace Industries falling 1.62%, Poongsan tumbling 4.98%, and Hanwha Aerospace retreating 1.76%.

In contrast, Hyundai Motor shares surged more than 11%, extending their rally to a sixth straight session after the company outlined plans to deploy humanoid robots at its U.S. manufacturing plants starting in 2028.

Australian equities opened higher, with the ASX/S&P 200 rising 0.38% after domestic inflation data came in below expectations.

The Consumer Price Index increased 3.4% year-on-year in November, undershooting forecasts of 3.7% and easing from October’s 3.8%.

Monthly inflation was unchanged, reinforced expectations that price pressures may be moderating and reducing the likelihood of near-term interest rate hikes.

In Greater China, Hong Kong’s Hang Seng Index slipped 0.43% in early trade, while mainland China’s CSI 300 added 0.13%, showed cautious sentiment amid mixed regional cues.

Geopolitical concerns remained in focus after the White House said President Donald Trump and his team were considering multiple options including potential military measures, to acquire Greenland, intensifying already firm rhetoric from Washington.

Investor attention was also drawn to developments in Venezuela following a U.S. operation over the weekend.

In commodities, U.S. crude oil futures fell 1.3% to $56.39 per barrel after President Trump said Venezuela would transfer between 30 million and 50 million barrels of oil to the United States.

U.S. equity futures were little changed during early Asian hours, following a strong overnight session on Wall Street.

The S&P 500 rose 0.62% to close at a record 6,944.82, the Dow Jones Industrial Average advanced 0.99% to an all-time closing high of 49,462.08, and the Nasdaq Composite gained 0.65% to finish at 23,547.17.

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