Asian Equities Rally; Nikkei Sets Record, Kospi Surges Nearly 7% as Regional Markets Rebound

Asia-Pacific equity markets rebounded sharply on Tuesday, mirroring overnight gains on Wall Street and easing fears sparked by the previous session’s sell-off in several asset classes. Major benchmarks across the region advanced, with Japan’s Nikkei 225 closing at a new record, South Korea’s Kospi briefly halting buy orders after a near-7% jump, and India’s key index rising after Washington and New Delhi announced a tariff-cutting agreement.

Japan’s Nikkei breaks new ground

The Nikkei 225 climbed 3.92% to finish at 54,720.66, its highest close on record. The broader Topix added 3.1% to 3,645.84. Tuesday’s gains erased losses logged on Monday and came as investors rotated back into large technology and industrial names. Market participants attributed part of the rally to bargain hunting as well as continued optimism over corporate earnings and structural reforms in Japan’s equity market.

Kospi rally triggers sidecar

South Korea’s Kospi led regional advances, closing up 6.96% at 5,288.08. The move was strong enough to activate a one-minute “sidecar” on purchase orders after KOSPI 200 futures rose more than 5%. Heavyweights SK Hynix and Samsung Electronics, which had fallen sharply in the prior session, rebounded 9.4% and 11.2%, respectively. Despite recent volatility, analysts at Counterpoint Research noted that expectations for an upturn in the memory-chip cycle continue to support the South Korean market’s longer-term outlook.

The Kosdaq, South Korea’s small-cap gauge, also participated in the recovery, advancing 4.19% to 1,144.33.

Indian equities react to U.S.–India tariff accord

In Mumbai, the Nifty 50 opened almost 5% higher after former U.S. President Donald Trump said the United States and India had reached a trade agreement that will immediately reduce tariffs on goods flowing between the two countries. According to Trump, Indian Prime Minister Narendra Modi agreed to increase purchases of American products and to phase out imports of Russian crude oil in favor of supplies from the United States and potentially Venezuela.

Initial enthusiasm moderated, but the Nifty remained up 2.73% in afternoon trading, while the BSE Sensex advanced 2.66%. Market strategists said the prospective boost to bilateral trade, combined with lower energy-import bills, bolstered sentiment toward Indian equities.

Australia lifts rates amid sticky inflation

Australia’s S&P/ASX 200 gained 0.89% to 8,857.1 even as the Reserve Bank of Australia raised its cash rate by 25 basis points to 3.85%. It was the RBA’s first increase since November 2023 and aligned with analyst expectations following data that showed inflation at a six-quarter high. Senior officials have repeatedly stated that policy easing is unlikely in the near term while consumer-price growth remains above the central bank’s 2.5% target.

Within the index, rate-sensitive real estate and consumer discretionary shares trimmed early gains after the decision, while major miners and energy producers advanced alongside firmer commodity prices.

Hong Kong and mainland China edge higher

Hong Kong’s Hang Seng Index inched up 0.22% to 26,834.77, supported by strength in technology and consumer stocks. On the mainland, the CSI 300 rose 1.18% to close at 4,660.11, aided by large financial and industrial names. Market participants continued to monitor signals from Beijing on additional policy support for domestic growth.

Precious metals stabilize after historic plunge

Investors also kept a close watch on precious-metal markets after last week’s sharp sell-off. Spot gold recovered roughly 6% to trade near $4,938.6 per ounce, while silver rebounded almost 10% to $86.96 per ounce. On Friday, silver had declined about 30%, marking its worst one-day loss since 1980, and gold had fallen nearly 10%. The swift turnaround highlighted lingering volatility across commodities, prompting traders to reassess positioning.

Wall Street sets positive tone

Tuesday’s Asian gains followed a constructive session on Wall Street, where all three major U.S. indices advanced. The Dow Jones Industrial Average finished 1.05% higher at 49,407.66, the S&P 500 added 0.54% to 6,976.44, and the Nasdaq Composite increased 0.56% to 23,592.11. Investors largely shrugged off recent weakness in silver and bitcoin, focusing instead on corporate earnings and the broader economic outlook.

Broader context

The sharp moves across equities, commodities and currencies underscore continued sensitivity to monetary policy shifts and geopolitical developments. Central banks in several advanced economies have signaled a cautious approach to easing, given elevated inflation. The International Monetary Fund recently reiterated that price pressures remain a key risk to the global recovery, particularly if energy markets tighten further.

In Asia, the latest rally partially reverses Monday’s broad decline, which many analysts viewed as a technical correction following months of strong performance. Market breadth improved on Tuesday, with most sectors in positive territory and trading volumes above recent averages.

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Key numbers at a glance

Japan: Nikkei 225 +3.92% to 54,720.66; Topix +3.1% to 3,645.84

South Korea: Kospi +6.96% to 5,288.08; Kosdaq +4.19% to 1,144.33

India: Nifty 50 +2.73%; BSE Sensex +2.66%

Australia: S&P/ASX 200 +0.89% to 8,857.1

Hong Kong: Hang Seng Index +0.22% to 26,834.77

China: CSI 300 +1.18% to 4,660.11

United States (Monday close): Dow Jones +1.05% to 49,407.66; S&P 500 +0.54% to 6,976.44; Nasdaq Composite +0.56% to 23,592.11

Commodities: Spot gold $4,938.6/oz (+6%); silver $86.96/oz (+10%)

Looking ahead

Traders will monitor upcoming economic releases, including China’s inflation figures and U.S. non-farm payrolls, for additional clues on the trajectory of monetary policy. In Australia, investors will parse the RBA’s statement and subsequent speeches for guidance on the duration of the current tightening cycle. Meanwhile, attention in India will shift to details of the U.S.–India trade pact, particularly any timelines for tariff reductions and energy-import shifts.

With earnings season in full swing, corporate results across technology, finance and consumer sectors are expected to influence short-term market direction. Analysts caution that while Tuesday’s gains demonstrate resilience, further bouts of volatility remain likely as markets adjust to evolving economic data and policy signals.

Crédito da imagem: Arutthaphon Poolsawasd | Moment | Getty Images