Asian equities opened strongly today, driven by softer-than-expected U.S. inflation data and renewed optimism over potential interest rate cuts by the Federal Reserve. The positive sentiment, further supported by the extension of the U.S.–China trade truce, lifted benchmarks across the region.
Tokyo leads regional gains
Japan’s Nikkei 225 advanced around 1.5% in early trading, extending its recent record-setting rally. Technology and auto stocks led the way, buoyed by expectations of sustained demand and lower financing costs. Local data showing easing producer price pressures provided an additional boost to investor confidence.
Broad-based strength across Asia-Pacific
The rally extended to other major markets in the region. South Korea’s Kospi rose nearly 1%, supported by semiconductor manufacturers, while Taiwan’s Taiex added 0.3%. In Hong Kong, the Hang Seng climbed 1.9%, with gains in both property and technology sectors, and China’s CSI 300 increased 0.9% amid hopes for stronger trade flows. Australia’s ASX 200 also touched record levels, aided by mining and banking stocks.
India benefits from domestic and global tailwinds
Indian equities opened firmly in positive territory, with the Nifty 50 up 0.31% to 24,563 and the Sensex gaining 0.26% to 80,428 in early trade. Gains were broad-based, with all major sectors in the green. Investor sentiment was boosted by domestic data showing retail inflation at an eight-year low of 1.55%, adding to the supportive global backdrop.
Key drivers of the rally
Market participants are positioning for a potential Federal Reserve rate cut in September, with probability estimates now exceeding 90% following the weaker-than-expected U.S. inflation print. The extension of the U.S.–China trade truce has also eased concerns over tariffs and supply chain disruption, reinforcing confidence across export-driven economies.
Outlook for the trading day
With global risk sentiment buoyant and domestic fundamentals improving in several Asian economies, analysts expect the region to maintain a positive bias through the session. However, attention will quickly shift to upcoming U.S. retail sales figures and further central bank commentary, which could influence momentum in the days ahead.
REFH – Newshub, 13 August 2025
