Asian Markets Diverge as Weak Factory Data Weighs on Sentiment

Key Moments

Asia-Pacific Equities Show Mixed Performance

Asian equity markets started the week on a mixed note, as Japanese stocks came under pressure following softer macroeconomic data, while other major benchmarks in the region posted modest gains or traded nearly flat.

Specifically, Japan’s Nikkei 225 slid 1.9% to 49,285.66 after government figures showed weaker-than-anticipated corporate investment. Furthermore, market participants were digesting fresh indicators of slowing factory activity.

In Hong Kong, the Hang Seng index advanced 0.8% to 26,068.05. Shares of major online food delivery platform Meituan fell 1.5% after the company reported a net loss in the latest quarter, citing intense competition in the delivery market that pressured pricing, even as revenue increased.

On the Chinese mainland, the Shanghai Composite index climbed 0.4% to 3,904.90. In South Korea, the Kospi was little changed at 3,926.20, while Australia’s S&P/ASX 200 slipped 0.3% to 8,583.30. Taiwan’s Taiex declined 0.5%, whereas India’s Sensex edged up 0.3%.

Manufacturing Data Highlights Regional Weakness

Investors across Asia monitored fresh manufacturing data for indications of how higher U.S. tariffs under President Donald Trump are influencing the region’s economies.

In Japan, a survey of factory managers pointed to continued weakness. The S&P Global Japan Manufacturing Purchasing Managers index (PMI) registered 48.7 in November, up slightly from 48.2 in October but still below the 50 threshold that separates expansion from contraction on a 0 to 100 scale. November marked the fifth consecutive month of contraction.

“The latest PMI data showed that Japan’s manufacturing sector continued to struggle with weak demand conditions in November, with firms signaling another solid decline in overall new business,” Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said in a report.

China’s factory sector also remained under pressure. An official survey released Sunday showed manufacturing activity contracted for the eighth straight month in November, highlighting ongoing challenges despite an extension of the trade truce between the U.S. and China.

Across the region, PMI readings pointed to subdued manufacturing conditions in November, although exports have been recovering in recent months, according to commentary from Shivaan Tandon, Asia economist at Capital Economics.

Good morning☕️

Asia just ruined everyone’s Monday.

Japan is hinting at rate hikes, the Fed won’t commit to cuts, AI valuations are getting scary… and markets are bleeding across the US, Europe, and India.

Only China is holding the line.

Bitcoin tanking.
Gold & oil flexing.… pic.twitter.com/cPRjRLxuQK

— Polvans (@Polvah) December 1, 2025

Regional Market Snapshot

U.S. Futures and Recent Wall Street Action

Early Monday, U.S. stock index futures traded lower. Futures tied to the S&P 500 were down nearly 0.7%, while contracts linked to the Dow Jones Industrial Average declined 0.4%.

On Friday, trading in futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq was halted for several hours due to a technical problem at the Chicago Mercantile Exchange. In particular, the CME attributed the disruption to an outage at a CyrusOne data center.

During Friday’s shortened post-Thanksgiving session, the S&P 500 advanced 0.5%, the Dow added 0.6%, and the Nasdaq increased 0.7%. U.S. equities had rebounded last week amid renewed expectations for another Federal Reserve interest rate cut, following a mid-November sell-off driven by concerns about the sustainability of enthusiasm around artificial intelligence.

Technology Stocks Face Diverging Fortunes

Among major technology names, Nvidia declined 1.8% on Friday, closing the month with a double-digit percentage loss. Oracle dropped 23% over the month, and Palantir Technologies fell 16%.

Some large-cap tech names, however, registered gains. Alphabet rose nearly 14% in the month, supported by positive sentiment surrounding its recently introduced Gemini AI model.

Fed Policy Outlook and Macro Backdrop

The Federal Reserve has already lowered interest rates twice this year in an effort to support a slowing labor market. Policymakers now face a more complex policy environment as inflation picks up while job growth weakens. Additional rate cuts could provide further support to the economy as employment softens, but might also exacerbate inflationary pressures.

Minutes from the Fed’s October meeting signaled that officials are likely to be sharply divided over the central bank’s next move on interest rates.

Retail Sector in Focus After Holiday Promotions

Investors were closely monitoring retail stocks in connection with Black Friday and Cyber Monday, as consumer spending during the key shopping period was expected to surpass earlier projections despite uncertainty around the U.S. economic outlook.

In recent trading, Macy’s slipped 0.3%, while Kohl’s gained 1.4%. Dick’s Sporting Goods eased 0.5%. Among specialty retailers, Abercrombie & Fitch advanced 2.9% and American Eagle Outfitters increased 0.7%.

Energy, Currencies, and Cryptocurrency Moves

In commodities trading early Monday, U.S. benchmark crude oil rose $1.05 per barrel. Brent crude, the global pricing benchmark, also advanced by $1.05 per barrel.

In foreign exchange markets, the U.S. dollar weakened to 155.57 Japanese yen from 156.14 yen. The euro edged up to $1.1602 from $1.1596.

In digital assets, Bitcoin fell 5.3% to $86,225.