Japanese and South Korean Stock Indexes See 3% Intraday Gains

Japanese and South Korean stock indexes widened intraday gains to 3% on Thursday, reflecting renewed investor confidence in the region. The rally followed mixed global economic data and ongoing geopolitical shifts, with both markets showing resilience amid regional tensions and regulatory developments according to market analysis. The gains were supported by strong performances in consumer, tech, and utilities sectors as reported by analysts.

South Korea’s export growth remained robust in December, with adjusted shipments rising 8.7% year-on-year. The increase eased concerns over global trade protectionism and tariff pressures, particularly after a recent US agreement to impose a 15% across-the-board tariff on South Korean goods. The trade surplus for the month stood at $12.2 billion, with strong demand for AI-related goods supporting the export performance according to market data.

India’s quick-service restaurant (QSR) market is undergoing a major consolidation as Devyani International and Sapphire Foods India plan to merge. The merger, to be executed through a share-swap, will create a single Yum! India franchisee for KFC and Pizza Hut. The deal is expected to result in annual synergies of Rs 210–225 crore and position the combined entity as one of the largest QSR operators in India according to company reports.

South Korean President Lee Jae-myung arrived in China for a four-day visit aimed at strengthening economic ties and addressing regional security concerns. The trip follows a recent missile test by North Korea and rising tensions across the region. The visit highlights South Korea’s strategic balancing act between its key economic partners in China and the United States according to diplomatic sources.

Asia’s equity markets are expected to remain active in 2026, with several major IPOs on the horizon. Baidu Inc., Zepto Ltd., and Coca-Cola’s India bottling unit are among the potential high-profile listings, with Hong Kong and India leading the IPO activity. The region raised $262.7 billion in 2025, with projections suggesting a continued strong performance in 2026 as market reports indicate.

Why Did This Happen?

The rise in Asian stock indexes reflects a combination of regional economic resilience and investor optimism. South Korea’s export figures suggest that global demand for its goods remains strong, despite trade tensions and rising tariffs. Japan’s market performance was supported by broad-based buying in key sectors, including consumer staples and utilities according to market analysis.

The consolidation in India’s QSR sector is driven by the need for scale and efficiency amid a slowdown in the market. Devyani and Sapphire’s merger aims to streamline operations and expand market share by combining over 3,000 stores. The deal is expected to result in cost savings and stronger supply chain integration, making the combined entity more competitive according to industry reports.

South Korea’s President visiting China comes at a time of heightened regional tensions, with diplomatic relations between Japan and China deteriorating and North Korea conducting missile tests. The visit is part of South Korea’s strategy to maintain a balanced foreign policy while fostering economic ties with both China and the US according to diplomatic sources.

How Did Markets React?

The gains in Japanese and South Korean stock markets were driven by positive economic reports and geopolitical developments. The benchmark index in Saudi Arabia, another key market, rose 0.6% on the first trading day of 2026, supported by consumer and utilities sectors according to financial reports.

South Korea’s trade surplus of $12.2 billion in December was a positive signal for the economy. While the US tariff on South Korean goods remains a concern, the 15% rate is lower than the previous higher duties imposed earlier in the year. This has provided some relief to South Korean exporters, particularly in the semiconductor and AI-related industries according to market analysis.

India’s stock markets saw mixed reactions to the merger announcement. While some investors welcomed the consolidation as a step toward greater efficiency, others remained cautious about the QSR sector’s overall growth prospects. The combined entity’s ability to execute the merger smoothly and realize the projected synergies will be closely watched according to market analysis.

What Are Analysts Watching Next?

Analysts are focusing on several key areas in the coming months. The US-China trade relationship, particularly the ongoing negotiations over South Korean goods, will remain a critical factor. Any shifts in tariffs or trade agreements could have a direct impact on South Korea’s export performance and broader economic growth according to market reports.

In India, the success of the Devyani-Sapphire merger will depend on the combined company’s ability to integrate operations and expand market share. Analysts will be watching for updates on the merger process, regulatory approvals, and the impact on the QSR sector’s overall performance. The company’s strategy for revitalizing Pizza Hut and expanding KFC in new territories will also be key indicators of future success according to industry analysis.

The geopolitical landscape in East Asia remains volatile, with tensions between major powers and North Korea’s recent missile launches. South Korea’s balancing act between its key economic partners—China and the US—will continue to shape its foreign policy decisions. The outcome of the President’s visit to China and subsequent diplomatic engagements will be closely monitored according to diplomatic sources.

Asia’s IPO market is expected to remain robust in 2026, with several high-profile listings anticipated. The success of these deals will depend on global market conditions, investor appetite, and regulatory developments. Particularly in Hong Kong and India, where IPO activity has been strong, the focus will be on whether these offerings meet or exceed expectations in terms of fundraising and market reception according to market analysis.