Asian Stocks Edge Higher Despite Trade Tensions and Soft Economic Data

Asian equities posted modest gains on Tuesday, bolstered by strength in tech shares tracking Wall Street, though investor sentiment remained fragile amid escalating U.S.-China trade friction and weakening economic indicators.

Tech Leads Regional Gains

• Japan's Nikkei 225 climbed 0.3%, supported by tech and chip-related stocks.

• Hong Kong's Hang Seng Index rallied 1.2%, rebounding from last week's losses.

• Taiwan's TSMC (TW:2330) rose 1% after its CEO noted AI demand could offset the negative impact of higher trade tariffs.

• BYD Co (HK:1211) gained nearly 2% following a solid May sales report, despite ongoing EV price war concerns.

• Li Auto (HK:2015) surged nearly 5% after Goldman Sachs raised its price target.

The rebound in tech was aided by a dip in U.S. Treasury yields, calming markets after a volatile May. Sentiment also benefited from renewed optimism in AI-related growth, especially among chipmakers and EV players.

China Market Flat, Tariffs in Focus

Chinese indices, including the CSI 300 and Shanghai Composite, traded flat following a holiday, as tensions with the U.S. clouded the outlook:

• President Trump's accusation that China breached a mid-May trade deal was firmly rejected by Beijing.

• Talks between the two sides have stalled, casting doubt over the possibility of a longer-term agreement.

• The Caixin manufacturing PMI for May contracted, reflecting the toll of heightened tariffs on overseas demand—mirroring weak government PMIs earlier in the week.

For those analyzing sector-based exposure to these macro headwinds, the Sector Historical API provides historical performance data across Asian and global sectors.

Australia Mixed as Rate Cut Fails to Lift Growth

• ASX 200 rose 0.3%, supported by a dovish RBA tone.

• Q1 company profits shrank 0.5%, and the country posted a larger-than-expected current account deficit, highlighting domestic economic softness.

Despite the rate cut in May, macroeconomic weaknesses persist, showing limited near-term stimulus impact.

Outlook

While Asian tech continues to benefit from global AI momentum, regional gains may remain capped by:

• Continued U.S.-China trade tensions

• Weak economic data, especially from China and Australia

• Cautious investor positioning ahead of upcoming central bank meetings

To assess how macro stress is influencing broader market sentiment, explore financial ratio shifts in key companies using the Ratios (TTM) API.

Markets are stabilizing, but trade and policy risks remain front and center. Keep an eye on chip stocks and EVs as potential relative outperformers in an otherwise cautious environment.