Asian stocks 2023 roundup: Japan, India shine while China lags

investing.com:

Investing.com-- Japanese and Indian stock markets were the top performers in Asia through 2023, with a dovish Bank of Japan and optimism over the Indian economy acting as key points of support.

On the other hand, Chinese blue-chip stocks were the worst performers in the region, as persistent concerns over an economic rebound in the country saw investors pivot out of local markets.

The Nikkei 225 was by far the best performer in Asia for the year, and was set for an over 30% gain after surging to 33-year highs earlier in the year. The Nikkei was also among the top performing indexes among its global peers, with the S&P 500 rising about 24% in comparison.

A dovish BOJ was a main point of support for Japanese stocks, as the bank largely maintained its ultra-dovish policies of yield control and asset purchases. The BOJ also kept interest rates at negative levels for a seventh year running.

Low interest rates, especially as interest rates rose in the rest of the world, drew foreign investors into Japanese markets, with sectors such as real estate and technology seeing strong inflows.

A batch of strong earnings, particularly from Japanese automakers and major trading houses, also bolstered the Nikkei.

But whether the Nikkei could extend gains into 2024 remained in question, especially as the BOJ flagged an eventual end to its ultra-dovish policies in the coming year. The Japanese economy also faces increased headwinds from slowing export demand.

Indian stocks also saw strong gains in 2023, especially towards the end of the year amid growing optimism over the Indian economy.

The Nifty 50 index was set to add nearly 19% this year, after hitting a series of record highs earlier in 2023.

Third-quarter GDP data showed the Indian