Asian Markets Gain as Investors Rotate Out of Tech Stocks

Asia-Pacific markets showed a predominantly positive performance on Tuesday following a mixed session on Wall Street.

Investor focus shifted away from technology stocks, leading to gains in several indices across the region, though Japan’s markets stood as a notable exception.

Market Highlights

• China: Mainland China’s CSI 300 surged by 2.63%, closing at 3,820.53, marking its largest single-day gain since November. Hong Kong’s Hang Seng index rose 1.9%.
• Japan: The Nikkei 225 and Topix indices declined by 1.83% and 1.16%, respectively, extending their four-day losing streak. Concerns over new U.S. semiconductor restrictions and rising government bond yields dampened sentiment.
• South Korea: The Kospi index gained 0.31%, while the Kosdaq rose 1.39%.
• Australia: The S&P/ASX 200 climbed 0.48%, breaking a three-day decline.
• India: Markets rebounded slightly following inflation data that reinforced the potential for future rate cuts.

On Wall Street, the Dow Jones Industrial Average climbed 0.86%, driven by a rotation into non-tech sectors like industrials and healthcare. In contrast, the tech-heavy Nasdaq Composite dipped 0.38%, reflecting a selloff in major technology stocks.

Regional and Sector Developments

1. China: The CSI 300 and broader MSCI China Index were buoyed by regulatory pledges to stabilize financial markets. The China Securities Regulatory Commission prioritized market stability for 2025, fueling optimism.
2. Japan: Losses in chip-related stocks followed tightened US semiconductor export rules. Additionally, a rise in Japan’s 40-year government bond yield to its highest level since 2007 added pressure.
3. South Korea and Australia: Gains in these markets reflected a broader positive sentiment in Asia, particularly in smaller-cap indices.
4. Currency Movements: Investors kept an eye on India’s rupee, which hit a record low against the US dollar, and the Chinese yuan, which authorities pledged to stabilize.

Key Drivers

• Rotating Investments: A significant shift from technology to other sectors is driving market trends, mirroring global investor sentiment.
• Policy Signals: Chinese authorities have reiterated their commitment to supporting the economy, boosting confidence in equity markets.
• Inflation Data: Declining inflation in India and forthcoming US inflation reports are shaping expectations about monetary policies.

CNBC and Bloomberg contributed to this report.