Most Asian stocks moved in a tight range on Tuesday as markets questioned data showing stronger-than-expected economic growth in China, while concerns over higher U.S. trade tariffs remained in play.
Technology stocks, especially in China, were buoyed by major chipmaker NVIDIA Corporation (NASDAQ:NVDA) stating that Washington will allow it to resume sales of a popular artificial intelligence chip in China, reflecting further deescalation in a trade conflict between Washington and Beijing.
But U.S. President Donald Trump’s recent announcement of tariffs against several other major economies remained a major point of contention for markets, especially given that the targeted economies have just over two weeks left to hash out trade deals with Washington.
Japan’s Nikkei 225 and TOPIX indexes fell slightly, maintaining a downward trend after Trump slapped the country with 25% tariffs. South Korea’s KOSPI fell 0.1%, with the country also facing a 25% U.S. levy.
Regional markets took middling cues from a sluggish overnight session on Wall Street. But S&P 500 Futures pared early losses after Nvidia’s announcement, with focus now squarely on key consumer price index inflation data due later on Tuesday.
China stocks sluggish as markets question Q2 GDP; Vanke profit warning weighs
China’s Shanghai Shenzhen CSI 300 fell 0.6%, while the Shanghai Composite slid 1%, taking limited support from strong gross domestic product data.
Losses in property firms also weighed following a dire profit warning from state-backed property giant China Vanke Co Ltd (SZ:000002). Shenzhen shares of the firm fell over 2% after it forecast a $1.67 billion loss in the first six months of 2025, ramping up concerns over a prolonged decline in China’s key property market.
GDP data showed the Chinese economy grew more than expected in the second quarter.GDP grew 5.2% year-on-year, more than expectations of 5.1%, while GDP in the first six months of 2025 came to 5.3%, remaining above Beijing’s 5% annual target.
The print was driven by improving trade relations between the U.S. and China, which saw the latter subject to only about a month of steep U.S. trade tariffs. Consumer spending subsidies from Beijing also helped bolster local growth.
But while the print was stronger than expected, Capital Economics analysts warned that it still showed the world’s second-largest economy losing momentum, and that growth was likely to worsen later in 2025.
"The economic outlook for the rest of the year remains challenging. With tariffs set to remain high, fiscal ammunition being depleted and structural headwinds persisting, growth is likely to slow further over the second half. We expect the economy to expand just 3.5% this year ," Capital Economics analysts wrote in a note.
Hong Kong tech rises on Nvidia H20 announcement
Hong Kong’s Hang Seng index curbed early gains to trade flat, as losses in China-exposed sectors, especially real estate, weighed.
But local tech majors, including Alibaba (NYSE:BABA) (HK:9988), Tencent Holdings Ltd (HK:0700), and Baidu (NASDAQ:BIDU) (HK:9888), advanced following Nvidia’s announcement that it will resume sales of its H20 AI chip in China.
Access to Nvidia’s H20 chip, which is wildly popular in China, will allow local tech majors to proceed with their artificial intelligence ambitions.
Chinese chipmakers, however, were less upbeat, given that the move now presents more overseas competition. Semiconductor Manufacturing International Corp (HK:0981) fell 1.1% in Hong Kong trade.
Taiwan stocks rose on Nvidia’s announcement, with major chipmaker TSMC (TW:2330) rising 1.4% on the prospect of increased demand in China.
Broader Asian markets were mildly positive. Australia’s ASX 200 rose 0.4% and was close to a record high.
Singapore’s Straits Times index rose 0.2%, while Gift Nifty 50 Futures for India’s Nifty 50 index were flat. Indian CPI inflation data read softer than expected for June, likely setting the stage for more monetary easing by the Reserve Bank.
Source : Investing.com