On August 12, 2025, Asian markets witnessed another rally with renewed optimism after the extension of the U.S.-China tariff truce. This fresh extension, which sees the reimposition of tariffs deferred for another 90 days, has restored investor confidence in the region.
The Nikkei 225 index in Japan reached fresh all-time highs, climbing upward by more than 2%, as technology-heavy sectors led the charge. The Topix index also gained, reflecting confidence in corporate earnings and interest in the forecast for international trade. On the other hand, mainland China saw the CSI 300 rise by half a per cent, and Australia’s S&P/ASX 200 touched new highs after the Reserve Bank slashed interest rates to a fresh two-year low of 3.6%, lending strength to the local market.
Similar positive trends were also being followed around Asia, with the Hang Seng index in Hong Kong sustaining, and broader Asia-Pacific indices rallied on improved investor sentiment. Analysts observed that with diminished geopolitical risks and a 250% increase in tariff on drug imports, attention shifted from concerns in the U.S., with investors taking the truce very positively. The market participants are now eyeing the U.S. inflation numbers that may serve to find new directions for Federal Reserve policy in the near future.
The Indian benchmark indices painted a more subdued picture. Around 80,235, the Sensex gave a return of about 0.46% to the downside, while Nifty 50 gave a return of around 0.40%, with subdued banking and financial goods from the likes of HDFC Bank and ICICI Bank. On the flip side, buy support from the auto and IT sectors brought some relief, with Maruti Suzuki and Mahindra & Mahindra showing their mettle.
Thus, Nikkei 225 index being led by the record-breaking performance of Japan, regional markets experienced a rally on hopes of renewed Nvidia and AMD AI Chip trade harmony between the U.S. and China, while countries such as India remained cautious on domestic challenges and sectoral pressure.