Asia Equities ex-Japan: Diverse growth drivers propel regional momentum

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15 July 2026

June Chua, Head of Asia Equities

Asia equities ex-Japan continued the significant momentum from 2025 with strong performance throughout the first half of the year. Amid numerous catalysts, June Chua, Head of Asia Equities outlines in this Mid-Year Outlook why she is constructive on the asset class for the remainder of 2026. Positive drivers include: potential geopolitical resolution in the Middle East and lower energy costs, supportive earnings and valuations, and differentiated growth drivers across the region.

Summary:

Asia equities have delivered strong year-to-date (YTD) returns amid various challenges. Earnings and valuations in Asian geographies remain supportive, with an overall positive outlook.
We reiterate our constructive view of Greater China equity markets in 2026, supported by attractive valuations and resilient fund flows.
Strong YTD performance in Korea and Taiwan have been a key driver for the upward trajectory of Asian equities. We currently maintain a high level of conviction in Korea’s technology and broader industrial sectors, as well as in Taiwan’s artificial intelligence (AI) supply chain. Additionally, incremental demand for domestic equities in both these markets is driven by local pensions.
In India, we remain true to our 5D structural investment themes – Digitisation, Demographics, Deglobalization, Decarbonization, and Deficit Reduction – which capture the multidimensional nature of the country’s economic transformation.
Equities in most ASEAN markets have underperformed their North Asian peers YTD. Despite the challenging environment, we believe coordinated efforts by governments, central banks and corporates are underway to navigate these headwinds.

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2026 Mid-year outlook: Greater China Equities

Greater China equity markets showed divergent trends in the first half of 2026, with China A-shares and the Taiwan Taiex index registering strong gains driven by resilient technology exports amid global demand for artificial intelligence (AI). Meanwhile, the MSCI China market pulled back, weighed by commerce subsidies amid fierce competition in food delivery and rising AI capital expenditure, which we believe have already been priced in. In this mid-year Outlook, we highlight five positive drivers for China and Hong Kong equities in the second half of the year. Furthermore, the team explains why it believes the Taiwan region’s technology sector should continue to enjoy positive momentum.

read more
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Global healthcare equities showed resilience amid 2025 volatility. The defensive characteristics, coupled with remarkable therapeutic innovations in the biopharmaceutical, MedTech, and tools sub-segments of this sector, will continue to be rewarded with capital appreciation over a full market cycle. Current valuations relative to the broader market make for an attractive entry point today, and periods like this tend to lead to outperformance for healthcare stocks over the long term.

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The global semiconductor industry remains strong – arguably the most robust we have seen in over three decades. This strength is supported by cutting-edge innovation, rising revenues and robust capital spending. While risks remain, the outlook for 2026 appears constructive, with demand for artificial intelligence (AI) applications showing few signs of slowing. Beyond AI, the non-AI markets could be poised for positive revisions as cyclical recovery gains traction after several years of consolidation.

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