Asian stock markets closed mixed on Thursday, with gains in South Korea, Australia and India offset by losses in Japan and subdued trading in Hong Kong. Investors remained cautious ahead of Federal Reserve Chair Jerome Powell’s address at the Jackson Hole symposium, which is expected to shape the outlook for interest rates and global risk sentiment.
Japan and Hong Kong underperform
The Nikkei in Tokyo ended the day 0.6 per cent lower as exporters were pressured by yen strength and profit-taking in technology stocks. Market participants highlighted that the currency’s appreciation has eroded competitiveness for Japan’s major manufacturers, particularly in the electronics and automotive sectors. Hong Kong’s Hang Seng index was little changed, reflecting weakness in property developers and continued uncertainty in the financial sector.
South Korea, Australia and India provide resilience
In contrast, Seoul’s KOSPI advanced 0.7 per cent, supported by gains in semiconductor companies, which benefitted from expectations of strong demand for memory chips. Australia’s ASX reached a new record high, lifted by the mining sector as iron ore and copper prices held firm. India extended its strong momentum, with the Sensex surpassing 82,000 and the Nifty50 crossing 25,000. Both benchmarks recorded a sixth consecutive day of gains, driven by robust inflows from domestic investors and optimism around corporate earnings.
Regional context and policy backdrop
Analysts noted that Asian markets are operating in a delicate balance. On one hand, strong domestic demand in India and steady commodity support in Australia highlight resilience. On the other, Japan’s exposure to global demand and Hong Kong’s fragile property sector remain weak points. Market direction is increasingly tied to the U.S. monetary policy outlook, which investors see as the primary driver of global liquidity conditions.
Implications for global investors
The divergence across Asia underscores the challenge for global investors seeking exposure to the region. India continues to outperform and attract flows as a growth story, while Japan and Hong Kong face structural headwinds. Short-term positioning is expected to remain cautious until Powell provides clarity on whether the Federal Reserve will deliver a 25-basis point cut in September, or signal greater caution.
Outlook
Asian markets are likely to remain volatile in the coming sessions. If Powell confirms a willingness to ease policy while retaining flexibility, risk appetite could broaden and support underperforming indices. Conversely, any hawkish signals could pressure export-dependent markets further, with Japan most vulnerable. India’s trajectory, however, appears stronger, underpinned by domestic factors less tied to U.S. rates.
REFH – Newshub, 21 August 2025
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