Most Asian Indices Close Mixed Amid Holiday Trading as China–Taiwan Tensions Resurface

Asian indices closed mixed on Tuesday as investors weigh regional geopolitical tensions amid thin holiday trading. In the commodities market, prices of gold and silver retreated after recent gains, while oil prices inched higher.

On Monday, Beijing staged what it described as the “most extensive war games” around Taiwan to showcase its ability to cut off the island from external support in the event of a conflict, reports said. The military exercises tested Taipei’s capacity to defend itself and its arsenal of US-origin weapons.

China’s Eastern Theatre Command said it had deployed troops, warships, fighter jets and artillery for its “Justice Mission 2025” exercises to encircle the island, conduct live-fire drills and simulate strikes on land and sea targets, including drills to blockade Taiwan’s main ports, a Reuters report said. The live-fire exercises continued on Tuesday across a record seven zones designated by China’s Maritime Safety Administration. Earlier, the military had said artillery firing would be confined to five zones, as per reports.

Taiwan’s Defence Ministry said there was also an additional zone for a two-hour drill on Monday morning, which took place without prior announcement from Chinese authorities in waters east of the island. China’s military exercises follow remarks by Japanese Prime Minister Sanae Takaichi suggesting that a hypothetical Chinese attack on Taiwan could trigger a military response from Tokyo. Taiwan rejects China’s claim of sovereignty, reiterating that only its people can decide the island’s future.

“Conducting live-fire exercises around the Taiwan Strait would not only constitute military pressure on us, but could also pose more complex challenges and impacts for the international community and neighbouring countries,” Hsieh Jih-sheng, deputy chief of the general staff for intelligence at Taiwan’s defence ministry, said on Tuesday.

Asian Markets Show Mixed Performance

Japan’s benchmark Nikkei 225 slipped 0.4% to 50,526.92, while Australia’s S&P/ASX 200 fell 0.4% to 8,725.70. Meanwhile, South Korea’s KOSPI rose 2.2% to 4,220.56. Despite the military tensions, shares in Taiwan ended higher, while the Shanghai Composite Index was little changed at 3,965.28.

Asia-Pacific markets also slipped in early trading hours amid fears of an AI bubble following a tech sell-off on Wall Street. On Monday, Nvidia shares fell over 1%, while Palantir Technologies, Oracle and Meta Platforms also posted losses, according to a CNBC report.