Nikkei Records Lift Asian Equities As GCC Watches Rate Path

Asian equity markets opened the week on a positive note, with Japanese stocks providing a powerful tailwind as the Nikkei index climbed to a new record high. The rally has buoyed sentiment across major Asia‑Pacific bourses and is being closely monitored by investors in the Gulf, who are weighing its implications for risk appetite and capital flows.​

According to Reuters, Asian stocks advanced for a second straight day in early trading on Tuesday, 10 February 2026, as the Nikkei’s extended rally coincided with a softer US dollar. The combination of strong Japanese corporate earnings, expectations of continued supportive monetary policy, and global demand for technology shares has propelled Tokyo’s benchmark index, reinforcing Japan’s status as a key driver of regional equity sentiment.

In broader Asia, tech‑heavy markets such as South Korea and Taiwan have benefited from renewed optimism about semiconductor capital spending in 2026. JPMorgan analysts expect chipmakers’ capex to accelerate this year after a period of caution, potentially boosting earnings for equipment suppliers and related industries.

The positive tone in Asia contrasts with a more mixed mood in the Gulf, where equity investors are balancing upbeat energy‑transition headlines against uncertainty over global interest‑rate trajectories. Saudi Arabia’s milestone of signing 24.4 GW of power purchase agreements in 2025 has strengthened growth prospects for listed utilities and industrials involved in renewable projects, while recent contract awards in Oman and Kuwait underscore the region’s infrastructure‑spending pipeline.

On the fixed‑income and tax side, Saudi Arabia’s ZATCA reminder that January 2026 withholding tax returns are due by 10 February serves as a reminder of ongoing efforts to bolster non‑oil revenue and fiscal discipline. Investors are watching how these measures, paired with initiatives such as the Tax Penalties Exemption program, affect corporate margins and dividend policies, particularly in capital‑intensive sectors.

In Southeast Asia, Thailand’s GULF has injected fresh momentum into green‑themed equities by securing 60 billion baht in loans for a 939 MW renewable and waste‑to‑energy portfolio, strengthening the investment case for climate‑aligned infrastructure plays on the Stock Exchange of Thailand. The deal showcases how large‑scale, ADB‑backed project financing can catalyze investor interest in transition sectors, even as broader markets remain sensitive to rate moves and currency volatility.

Currency markets remain a key driver of equity positioning. The dollar’s recent softness has provided breathing room for Asian central banks and improved the outlook for foreign investors in markets such as Indonesia, the Philippines, and Malaysia, where FX risk often shapes portfolio decisions. For Gulf sovereign wealth funds and family offices allocating to Asia, currency trends and the timing of any major central‑bank policy shifts will be critical variables in 2026 allocation strategies.

With AI, connectivity, and energy transition themes dominating corporate news flow, sector rotation within Asian and GCC markets is likely to remain pronounced. Investors are increasingly favoring companies that combine exposure to these long‑term trends with strong balance sheets and clear capital‑return policies, a pattern that is already evident in the outperformance of selected Japanese, Korean, and Gulf names.