Full Breakdown
Impact of Lunar New Year on Global Markets and Commodities
2/17/2026, 7:48:26 AM
Overview of the Lunar New Year Market Closures
The Lunar New Year, celebrated in 2026 starting February 17, has significant implications for global markets, particularly in Asia. During this period, mainland China’s financial markets, including the Shanghai and Shenzhen Stock Exchanges, will be closed from February 17 to February 23, while Hong Kong will operate on a shortened schedule, closing fully from February 17 to February 19. This seasonal pause affects trading volumes and liquidity, leading to subdued market activity across Asia and beyond.
Market Reactions and Trading Activity
As the Lunar New Year approaches, trading activity has been notably limited. In Hong Kong, the Hang Seng Index rose 0.5% to close at 26,705.94 on February 16, marking a positive end to the trading week. However, overall trading volumes were light as investors locked in profits ahead of the holiday. The index has seen a substantial increase of 32% since the beginning of the Year of the Snake on January 29, 2025, reflecting strong southbound inflows.
In contrast, copper prices fell nearly 1% to around $5.75 per pound, continuing a downward trend as Chinese investors were absent during the holiday. This decline follows a period of speculative buying that had driven prices to record highs above $6.5 per pound in late January. The decline in copper prices is attributed to rising global inventories and uncertainty surrounding U.S. import tariffs.
Commodity Market Dynamics
The impact of the Lunar New Year extends to various commodities. Copper and aluminum prices have decreased, with copper dipping below $12,800 a ton as stockpiles increased. The London Metal Exchange reported that copper inventories reached their highest levels in over two decades. Similarly, iron ore futures have remained around CNY 760 per ton, pressured by high inventories and reduced demand as mills scale back operations for the holiday.
Analysts note that the holiday period often leads to adjustments in trading positions, with potential volatility in commodities due to thinner participation. The closure of Chinese markets is expected to have ripple effects on global commodities, currencies, and equities, as China is a major consumer of metals and energy.
Broader Implications for Investors
The Lunar New Year holiday is not only a cultural event but also a critical economic marker. The extensive travel and family reunions associated with the holiday are closely monitored as indicators of consumer confidence and economic momentum. Post-holiday trading can experience pent-up demand, leading to significant market movements depending on global developments during the closure.
Investors are advised to keep an eye on geopolitical developments, commodity prices, and global equity trends as mainland markets remain offline. The reopening of Chinese markets will be pivotal, with key factors such as policy signals from Beijing and consumption data from the holiday period expected to influence market dynamics.
Conclusion
The Lunar New Year significantly impacts trading activity and market sentiment across Asia and globally. As investors navigate this period of reduced liquidity and potential volatility, the reopening of markets will be crucial in determining the trajectory of commodities and equities in the weeks to follow.
