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Asia's Old Economy Outshines AI Hype
19 Oct
Summary
- Non-tech sectors like financials and energy drive market growth.
- Global defence spending surge benefits Asian manufacturers.
- Green energy push offers opportunities despite trade friction.
Despite mounting doubts about Asia's artificial intelligence boom, the region's market performance is significantly bolstered by traditional sectors.
While technology has claimed six of the top-performing market sectors in 2026, nine others are driven by financials, energy, and industrials. Investments in power and infrastructure, partly linked to data centers, are also influenced by geopolitical unrest and high energy prices.
Global defence spending is a major investment driver due to escalating military tensions. Asian defence manufacturers are poised to benefit as Western capacity faces constraints. This trend, coupled with a global push for infrastructure buildouts and energy independence, further supports Asia's market growth.
Companies in green energy technologies, particularly Chinese EV and battery manufacturers with significant overseas revenue, are positioned to navigate trade friction. However, risks include bureaucratic delays in defence contracts, price wars in green energy markets, and potential ripple effects from an AI pullback.
