Asian Stocks Gain as Tech Shares Stabilize After AI-Led Rout

Asian stocks traded mostly higher on Tuesday as investors cautiously returned to technology shares following a sharp, AI-driven rout in July. The improved risk appetite was supported by a strong overnight session on Wall Street, where the Dow Jones Industrial Average closed at a record high.

Tech Rebound Drives Regional Gains

Chinese equities led the region's advance, with the blue-chip Shanghai Shenzhen CSI 300 index rising 0.6%. Technology firms that had previously sold off saw a rebound, including Foxconn Industrial Internet, which jumped over 4%. In Hong Kong, the Hang Seng index was an outlier, falling 0.6%, though Alibaba shares gained about 0.7% after the company unveiled its latest large AI model.

South Korea’s KOSPI index trimmed early losses to trade 0.3% lower, stabilizing after a sharp sell-off on Monday. Chipmakers like Samsung Electronics and SK Hynix steadied. According to analysts at Citi, market positioning in the KOSPI remains deeply bearish, but sentiment could improve if confidence in the AI theme stabilizes.

Japan Lags While Australia Outperforms

In contrast to the broader regional trend, Japanese markets remained under pressure. The benchmark Nikkei 225 fell 0.6%, and the broader TOPIX index also lost 0.6%, with major electronics and manufacturing stocks trading lower.

Ad

Australia’s S&P/ASX 200 was a standout performer, rising about 1%. The gains were primarily driven by a strong rally in lithium mining stocks, with Liontown Resources gaining over 5% and European Lithium surging nearly 10%.

Market Focus Shifts to Data and Earnings

Investor attention is now turning to a series of upcoming economic and corporate events. The Reserve Bank of India is widely expected to hold interest rates steady in its upcoming decision. In South Korea, data showed consumer inflation slowed to a three-month low in July.

Globally, markets are awaiting key U.S. labor market data, culminating in Friday’s nonfarm payrolls report, for fresh insights into the Federal Reserve's policy outlook. Major U.S. corporate earnings from companies including Disney, Uber, and Airbnb are also scheduled for later this week.