Asian equity markets showed a divided performance on Tuesday, July 29, 2025, with notable gains in Hong Kong, South Korea, Australia, and China, while heavyweight economies Japan and India posted meaningful declines. Currency volatility also weighed on sentiment, as both the Japanese Yen and Australian Dollar slipped further against the dollar.

Hong Kong and South Korea Lead the Region with Moderate Gains

Market optimism in several key Asian economies lifted indices in early Tuesday trade, driven by tech strength, policy support, and positive regional momentum.

Performance Highlights:

• Hang Seng Index climbed 0.68% to 25,562.13, supported by renewed interest in Chinese internet stocks and signs of further easing from Beijing.
• KOSPI Composite Index rose 0.42% to 3,209.52, buoyed by chipmakers and foreign inflows amid positive trade expectations.
• S&P/ASX 200 gained 0.36%, reaching 8,697.70 in Sydney, helped by resource stocks and local earnings optimism.
• Shanghai Composite Index (SSE) nudged 0.12% higher to 3,597.94, reflecting a cautious recovery in Chinese equities.

These moves reflect broader confidence in Asia-Pacific markets despite global uncertainties around interest rates, inflation data, and geopolitical risk.

Japan’s Nikkei and India’s Sensex Face Selling Pressure

The region’s momentum was weighed down by declines in Japan and India, two of Asia’s largest equity markets, where risk sentiment was dented by profit-taking and macroeconomic concerns.

• Nikkei 225 slumped 1.10% to 40,998.27, snapping its recent winning streak. Investors reacted to weak manufacturing data and the yen’s continued weakness, which stoked inflation concerns.
• S&P BSE SENSEX dropped 0.70% to 80,891.02, as traders locked in profits and braced for a busy week of corporate earnings and possible Reserve Bank of India commentary.

Analysts noted that both markets may face near-term headwinds but maintain longer-term uptrends supported by strong fundamentals and corporate profitability.

Currency Market Update: Yen and Aussie Dollar Under Pressure

Currency markets also reflected unease, with regional currencies struggling against the U.S. dollar.

Key Moves in Currency Indices:

• Japanese Yen Index fell 0.57% to 67.34, continuing its downward trend as traders expect the Bank of Japan to remain dovish compared to global peers.
• Australian Dollar Index declined 0.69% to 65.18, under pressure from commodity price softness and expectations of limited rate hikes from the Reserve Bank of Australia.

Weaker currencies may provide some support to exporters but also stoke concerns over import costs and inflationary pressure, especially in Japan.

Outlook: Caution Persists Ahead of Economic Data

While today’s trading session showed resilience in parts of Asia, overall investor sentiment remains cautious. The markets are awaiting:

• Earnings reports from major regional tech and banking firms
• China’s upcoming PMI (Purchasing Managers’ Index) release
• U.S. Federal Reserve and Bank of Japan policy updates later this week

Most analysts suggest that volatility could rise in the coming days as investors digest a mix of macroeconomic indicators, central bank rhetoric, and geopolitical developments.

Bottom Line

Asian markets kicked off Tuesday, July 29 with a mixed performance, underscoring the uneven investor mood across the region. While Hong Kong, South Korea, Australia, and China posted modest gains, Japan and India saw clear outflows. With currency weakness adding another layer of complexity, the region remains in a watchful mode, awaiting further cues from global economic data and policy decisions.

Stay tuned for more midweek updates as the global picture continues to evolve.