Asian Stock Markets Rise as Technology Rally Lifts Nikkei to Record High

Asian Stock Markets Rise as Technology Rally Lifts Nikkei to Record High

AI optimism, Japanese election speculation and strong tech stocks drive gains across Asia

Asian Shares Advance on Global Tech Optimism

Asian stock markets moved higher on Tuesday, led by strong gains in technology shares as optimism around artificial intelligence continued to support investor sentiment. Japan’s benchmark index surged to a fresh record, while Hong Kong and other regional markets followed Wall Street’s positive lead.

The rally came after the S&P 500 closed at a record high overnight, driven by continued strength in US technology stocks. Investors largely looked past ongoing political tensions between the White House and the Federal Reserve.

Nikkei 225 Hits All-Time High

Japan’s Nikkei 225 was the standout performer in the region, climbing more than 3% to a new record high after markets reopened following a public holiday. The broader TOPIX also reached a record level.

The gains were driven by a combination of catch-up buying and reports that Japanese Prime Minister Sanae Takaichi may call a snap general election as early as February. Such a move could strengthen her parliamentary majority and pave the way for additional fiscal stimulus.

Expectations of increased government spending helped offset concerns over diplomatic tensions between Japan and China, particularly following late-2025 comments by Ms Takaichi regarding Taiwan.

Asian Technology Stocks Extend Rally

Technology shares across Asia continued to benefit from strong demand linked to artificial intelligence and semiconductor growth.

Hong Kong’s Hang Seng Index rose nearly 2% to its highest level in two months, supported by a wave of interest in Chinese technology listings.

Key drivers included:

• Strong debut performances by newly listed Chinese AI companies
• Renewed investor interest in established Chinese tech giants
• Continued optimism over long-term AI adoption

Several recently listed Chinese AI firms recorded sharp gains, while major technology names such as Alibaba Group, Baidu and Tencent advanced between 1% and 4%.

China and Hong Kong Markets Strengthen

Mainland Chinese markets also edged higher. The CSI 300 and Shanghai Composite posted modest gains as technology and electric vehicle stocks outperformed.

Chinese electric vehicle makers saw notable strength after the European Union released new guidance that could allow Chinese manufacturers to avoid higher import tariffs. Shares in BYD rose more than 3% following the announcement.

Broader Asia-Pacific Markets Mixed but Positive

Elsewhere in the region, gains in technology shares helped lift several major indices:

• South Korea’s KOSPI rose around 0.6%
• Australia’s ASX 200 jumped close to 1%
• Singapore’s Straits Times Index gained 0.5%

India’s Nifty 50 was largely flat, despite softer-than-expected inflation data raising expectations of further interest rate cuts by the Reserve Bank of India.

However, concerns remain over potential increases in US trade tariffs on Indian goods, which analysts warn could weigh on economic growth.

Outlook: Focus Turns to US Inflation Data

While Asian markets remain supported by strong technology momentum, investor attention is now shifting to upcoming US inflation data. The figures could influence expectations for future interest rate moves and set the tone for global markets in the days ahead.

For now, optimism around artificial intelligence, combined with political developments in Japan, continues to provide a powerful boost to Asian equities.

Sources: (Investing.com, Fool.com)