Asian stock markets were mixed on Tuesday, July 29, 2025, with Hong Kong, South Korea, Australia and China posting strong gains, while Japan and India – the region’s two largest economies – suffered sharp declines. Currency volatility also weighed on sentiment, with both the Japanese yen and Australian dollar continuing to weaken against the US dollar.

Hong Kong and South Korea lead the region with modest gains
Optimism in key Asian markets helped major indexes rise during Tuesday’s trading session, supported by strength in the technology sector, government support and positive regional momentum.

Performance highlights:

The Hang Seng Index rose 0.68% to 25,562.13, supported by a resurgence in interest in Chinese internet stocks and signs of further easing from Beijing.
The KOSPI rose 0.42% to 3,209.52, supported by chipmakers and foreign capital inflows on positive trade expectations.
The S&P/ASX 200 rose 0.36% to 8,697.70 in Sydney, supported by resource stocks and optimism around the earnings season.
The Shanghai Composite Index rose 0.12% to 3,597.94, indicating a cautious recovery in Chinese stocks.
The moves reflect broader confidence in Asia-Pacific markets despite global uncertainty around interest rates, inflation data and geopolitical risks.

Nikkei and Sensex under selling pressure
Regional momentum was dampened by declines in Japan and India, two major Asian economies, where sentiment was hurt by profit-taking and macroeconomic concerns.

The Nikkei 225 fell 1.10% to 40,998.27, snapping a long-running rally. Investors reacted to weak manufacturing data and a continued weakening yen, which fueled inflation concerns.
The S&P BSE SENSEX fell 0.70% to 80,891.02, as traders booked profits ahead of a busy week of earnings reports and possible responses from India’s central bank.
Analysts said both markets could face headwinds in the short term, but the long-term outlook remains positive based on strong fundamentals and high corporate profitability.

Currency Market Update: Pressure on the Yen and Australian Dollar
Currency markets also expressed concern, as regional currencies weakened against the US dollar.

Key moves in currency indices:

The Japanese Yen Index weakened by 0.57% to 67.34, continuing its downward trend amid expectations that the Bank of Japan will continue its expansionary monetary policy relative to its global peers.
The Australian Dollar Index fell by 0.69% to 65.18, due to falling commodity prices and expectations of limited interest rate hikes by the Reserve Bank of Australia.
The weakening currencies may support exporters, but also raise concerns about rising import costs and inflationary pressure – especially in Japan.

Outlook: Caution continues ahead of economic data releases
Although today’s trading indicated partial resilience in some Asian markets, the overall sentiment remains cautious. Investors await important data:

financial reports from leading technology companies and banks in the region,
the upcoming release of China’s Purchasing Managers’ Index (PMI),
and monetary decisions by the Federal Reserve and the Bank of Japan later this week.
Most analysts expect volatility to increase in the coming days as investors digest a mix of macroeconomic indicators, central bank statements and geopolitical developments.

Summary
Asian markets opened Tuesday, July 29 with mixed performances, reflecting the uneven state of investor sentiment. While Hong Kong, South Korea, Australia and China posted modest gains, Japan and India posted sharp declines. With currency weakness adding complexity to the picture, the region maintains a wait and see stance, ahead of economic releases and policy decisions later this week.

Stay tuned for more updates throughout the week as developments in global markets continue to unfold.