Asian markets opened with a cautious tone on Tuesday, as investors reacted to Wall Street’s modest losses and watched for fresh signals from Chinese policymakers amid continued concerns over growth in the region’s largest economy.
Muted sentiment across the region
The Nikkei 225 in Tokyo slipped 0.3% in early trade, pausing after recent gains that had lifted the index to 34-year highs. Exporters faced light profit-taking as the yen held steady near 157 per US dollar, with traders watching closely for any verbal intervention from Japanese authorities. Investors also continued to rotate cautiously ahead of a wave of corporate earnings due later this week.
In South Korea, the Kospi opened flat, as semiconductor stocks showed little momentum after Monday’s muted US tech session. Shares of Samsung Electronics and SK Hynix edged lower despite strong forward guidance, reflecting investor nerves around valuations. The Bank of Korea is set to meet later this week, though markets largely expect no change in rates.
Hong Kong under pressure again
The Hang Seng Index fell 0.9% at the open, led down by property and technology names. Chinese developer stocks continued to face selling pressure, despite last week’s policy announcements aimed at stabilising the sector. Sentiment remains fragile amid expectations that China may need to unveil stronger measures to restore confidence.
The mainland’s Shanghai Composite opened 0.4% lower, with traders disappointed by the lack of new stimulus announcements. While recent official data has shown some stabilisation in factory output and credit growth, retail sales and home prices remain weak. Investors are closely watching for signs of more decisive fiscal or monetary moves from Beijing.
Australia edges higher on mining strength
Australia’s ASX 200 rose 0.3% in early trade, lifted by strong gains in the mining sector after iron ore prices rebounded overnight. BHP and Rio Tinto both gained, while energy stocks also supported the index as Brent crude held above $82 per barrel. The Reserve Bank of Australia is expected to hold rates steady at its August meeting, with inflation showing signs of moderating.
Cautious mood amid global uncertainty
Across Asia, traders are balancing regional risks with broader global uncertainty. The upcoming release of US inflation data and earnings from major technology firms are expected to influence sentiment through the week. Meanwhile, tensions in the South China Sea and continued geopolitical unease in Ukraine and the Middle East remain on investors’ radar.
Currency markets were largely steady in early Tuesday trade, with the dollar slightly firmer. Bond yields across the region held near recent levels, suggesting investors are awaiting clearer signals on growth, inflation, and monetary policy from global central banks.
Outlook
The cautious start reflects lingering unease across Asian markets. While valuations in some markets remain supportive, the absence of a strong catalyst is keeping investor positioning defensive. With inflation and earnings in focus, sentiment is likely to remain fragile unless key economic data surprises to the upside.
REFH – Newshub, 22 July 2025
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