Asian Stocks Post Best Performance in Eight Years, Korean Market Up 76% to Lead the World

After a year battered by tariffs, AI swings, and sharp moves in precious metals, Asian stocks are wrapping up a rollercoaster 2025 on a high note—and on track for their strongest annual performance in eight years.

 

As of Wednesday, the MSCI Asia-Pacific ex-Japan Index was down a slight 0.03%. Still, it's poised for a 27% gain this year, the biggest since 2017, powered largely by surging chipmakers and the broader AI boom.

Strong Showings Across Major Asian Markets  

Most key Asian benchmarks delivered impressive returns this year.  

 

In mainland China, markets closed Wednesday with broad gains. The ChiNext Index led with nearly 50% YTD, the Shanghai Composite broke above 4,000 on October 28 for a decade high, and total A-share market cap hit nearly 109 trillion yuan—adding 23 trillion yuan YTD and setting a new record.

 

Hong Kong wrapped up 2025 trading early Wednesday. The Hang Seng fell 0.87% on the day but finished the year up 27.77%; the Hang Seng Tech Index dropped 1.12% Wednesday but rose 23.45% overall.

 

Korea’s market was the global standout. The KOSPI closed Tuesday down 0.15% but soared 76% for the year, driven mostly by SK Hynix and Samsung.

 

Vietnam also shone brightly. Despite mid-year tariff hits from Trump policies, the VN Index still ended up 40% YTD.

 

Japan was closed Wednesday, but the Topix finished Tuesday at a record year-end high, topping its 1989 bubble-era peak for the third straight annual gain.

 

With most Asian markets off Thursday for New Year’s, volumes are likely light and volatility muted this week.

AI Boom Fuels Asia’s Rally  

“Despite a few bumps, returns this year have been very solid,” said Kyle Rodda, senior financial analyst at Capital.com.

 

“The gains were concentrated, but AI’s momentum plus loose monetary and fiscal conditions lifted risk assets to record levels.”

 

Over the past year, Asia navigated tariff battles, the longest U.S. government shutdown ever, and geopolitical turbulence—yet still posted standout global gains.

Looking to 2026  

“AI remains the dominant theme next year, but in a different phase: less hype, more real applications, and tougher scrutiny on returns,” said Charu Chanana, chief investment strategist at Saxo Bank in Singapore. “The biggest risk is crowded positioning in AI and precious metals unwinding.”

 

Investors will also watch the Fed’s rate path closely. Earlier this month, the Fed projected just one cut; traders are pricing in at least two.