Asia Equity Market Outlook: Q3 2026
With technology now half the market and priced for perfection, the opportunity in Asian equities has quietly moved elsewhere.
Asian equities rose roughly 32% in the second quarter of 2026, driven almost entirely by technology. The sector surged nearly 93% on AI optimism and, alongside financials, now represents about half of the broad Asian market.
While technology has fueled the rally, valuations have become stretched. We see better opportunities outside the crowded AI trade, particularly in Chinese banks, biotech, and internet companies, which continue to trade at discounts to intrinsic value.
Morningstar’s Q3 2026 Asia Equity Market Outlook examines sector performance and valuations, the impact of global and regional policy developments, and our outlook for markets across China, Japan, and the broader region.
Access the report to discover the sectors and stocks our analysts believe offer the most compelling opportunities in Asian equities.
