Asian equity markets delivered a mixed performance on Tuesday, with most benchmarks trading higher as Chinese stocks rallied strongly following the extended Lunar New Year break. However, Hong Kong bucked the regional trend, suffering sharp losses amid mounting fears that rapid advancements in artificial intelligence (AI) could disrupt traditional technology business models.
At the same time, expectations of relatively softer U.S. trade tariffs on Asian economies supported export-driven sectors in Japan and South Korea, helping regional markets shake off weakness seen earlier on Wall Street.
After a nine-day Lunar New Year holiday, mainland Chinese markets resumed trading on a firm footing.
The CSI 300 index climbed 1.3%, while the Shanghai Composite gained 1.1%, reflecting pent-up optimism during the holiday period.
Investor sentiment improved after the Supreme Court of the United States ruled last week that a large portion of former President Donald Trump’s trade tariffs were unlawful and would expire.
Although Trump announced additional tariffs under a different legal framework, the new measures did not specifically target China and were relatively less aggressive than previous rounds.
This development provided a boost to Chinese export-oriented sectors, including manufacturing and electronics, which had previously been pressured by trade uncertainty.
Beyond trade policy, signs of resilient consumer spending during the Lunar New Year period further strengthened market confidence.
Preliminary data indicated solid retail and travel activity, raising expectations that domestic demand may provide stronger support to China’s economic recovery in the coming quarters.
In stark contrast to mainland gains, Hong Kong’s Hang Seng Index dropped nearly 2%, making it the worst-performing major market in Asia during the session.
The selloff was concentrated in technology and pharmaceutical shares, as investors reacted to growing concerns that new AI tools could significantly reduce reliance on conventional software platforms.
Major Hong Kong-listed tech companies suffered notable losses:
Alibaba Group
Baidu Inc
Tencent
Each declined between 2.8% and 4%.
Market anxiety intensified after AI startup Anthropic unveiled a new suite of tools that it claims can automate tasks traditionally handled by enterprise software. A separate report from Citrini Research also warned of potential long-term disruption if AI development continues at its current pace.
Interestingly, smaller AI-focused companies moved sharply higher as investors rotated capital toward firms expected to benefit directly from AI expansion.
MiniMax Group surged 7%
ZhipuAI jumped 16.4%
The divergence highlighted a broader theme: while AI presents risks for established tech giants, it simultaneously creates opportunities for emerging players.
South Korea stood out as a regional outperformer, with the KOSPI index surging 1.6% to a record high.
The rally was driven by strong gains in memory chip manufacturers, which are expected to benefit significantly from accelerating global AI demand.
Two key semiconductor leaders posted solid advances:
Samsung Electronics
SK Hynix
Both stocks reached fresh highs amid optimism that AI-related memory demand will sharply boost revenues.
Executives at SK Hynix pledged on Monday to further expand memory chip production to meet surging demand from AI applications.
Global investor attention is now firmly fixed on the upcoming earnings report from NVIDIA Corporation, scheduled for release Wednesday.
As the world’s most valuable semiconductor company and a key driver of the AI boom, NVIDIA’s results are widely seen as a barometer for AI-related investment trends. Samsung and SK Hynix are major memory chip suppliers to NVIDIA, meaning its performance could have significant spillover effects across Asian markets.
S&P 500 futures rose 0.3% during Asian trading hours, reflecting cautious optimism ahead of the report.
Japan’s Nikkei 225 climbed 0.9%, supported by export-oriented firms benefiting from easing trade tensions. The broader TOPIX index added 0.1%.
Meanwhile, Australia’s ASX 200 slipped 0.1%, and Singapore’s Straits Times Index fell 0.7%. In India, Nifty 50 futures edged up 0.1%, as local exporters found limited relief from the U.S. Supreme Court ruling.
However, uncertainty remains. Trump warned on Monday that additional tariffs could be imposed if countries deviate from recently signed trade agreements with Washington, keeping investors cautious.
Tuesday’s session underscored the dual forces shaping Asian equity markets: U.S. trade policy and the accelerating AI revolution.
While China and South Korea benefited from improved tariff expectations and AI-driven semiconductor optimism, Hong Kong faced headwinds from fears that AI innovation could undermine traditional technology giants.
Looking ahead, market direction will likely hinge on two key factors: clarity on U.S. trade policy and the financial results of NVIDIA, which could set the tone for the next phase of the global AI investment cycle.
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