Most Asian stocks rose on Tuesday, extending recent gains amid growing bets that U.S. President Donald Trump’s tariff agenda will be less severe than expected.
But Chinese markets were outliers, especially shares in Hong Kong, as profit-taking in heavyweight technology stocks from a stellar year-to-date rally battered the Hang Seng.
Broader Asian markets took a positive lead-in from Wall Street, which clocked strong gains during Monday’s session as reports suggested that Trump’s April 2 tariffs will be less severe than initially feared.
But Wall Street futures fell slightly in Asian trade, as investors still remained cautious over the impact of Trump’s tariffs, given that several Asian countries will be targeted by his reciprocal tariffs.
Japan’s Nikkei advances, TOPIX hits 9-mth high
Japan’s Nikkei 225 index was among the best performers in Asia on Tuesday, rising 0.7% on support from heavyweight export-oriented stocks, which tracked some weakness in the yen.
But domestically-exposed Japanese stocks also advanced, with the TOPIX index briefly hitting its highest level since July 2024.
Still, sentiment towards Japan soured this week after softer-than-expected purchasing managers index data. But bumper wage hikes and increased private consumption are expected to underpin activity in 2025, although they are also expected to elicit more interest rate hikes by the Bank of Japan.
The minutes of BOJ’s January meeting- where the central bank raised rates by 25 basis points- showed policymakers discussing further hikes.
Other Asian markets advanced, with Australia’s ASX 200 adding 0.4%, while Singapore’s Straits Times surged 0.9% to a record high.
South Korea’s KOSPI lagged, falling 0.3% despite strong gains in Hyundai Motor (KS:005380) (OTC:HYMTF) after it announced plans to invest $21 billion in the U.S.
Futures for India’s Nifty 50 index pointed to a mildly positive open, as the index rebounded further from nine-month lows hit at the beginning of March. The Nifty hit a 1-½ month high on Monday.
Chinese stocks fall, Hong Kong slides 2% on tech losses
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.2% and 0.1%, respectively, while the Hang Seng was the worst performer in Asia with a 2% drop.
Major Chinese tech stocks were battered by profit-taking after optimism over more stimulus and China’s artificial intelligence prospects drove a stellar rally so far in 2025.
Xiaomi (OTC:XIACF) Corp (HK:1810) sank 5% and was among the biggest weights on the Hang Seng after it raised $5.5 billion in an upsized Hong Kong share sale. The stock recently hit a record high on optimism over its prospects in the crowded electric vehicle market.
Alibaba (NYSE:BABA) (HK:9988) fell 2.7% after Chair Joseph Tsai warned of a growing bubble in the AI data center space, amid concentrated but overlapping efforts in the U.S. and China to build more infrastructure.
