Asian Markets Mixed Amid US Tariff Concerns & China‘s Rally; Nikon Surges on Stake Potential
Hong Kong/Sydney – August 26, 2025 – Asian markets presented a mixed picture Wednesday as investors digested news of escalating US tariffs on India and awaited key earnings reports from the US, while China’s stock market continued a strong run despite warnings of potential overvaluation.Industrial profits in China slipped 1.5% year-on-year in July, though this represents a recovery from more important declines in previous months. Concurrently, new US tariffs of 25% on Indian goods are set to go into effect Wednesday, effectively doubling overall duties on Indian exports to the US to 50%. Indian markets were closed today for a holiday.
Japan’s Nikkei 225 edged higher, boosted by a surge in Nikon Corporation shares. Nikon jumped over 20% as of 10:04 p.m. ET Tuesday following reports from Bloomberg that EssilorLuxottica, the parent company of Ray-Ban, is considering increasing its stake in the photographic equipment manufacturer. The broader Topix index, however, fell 0.3%.
South Korea’s Kospi declined 0.17%, marking its second consecutive session of losses. The Kosdaq, focused on smaller companies, also decreased, falling 0.16%. Australia’s S&P/ASX 200 managed a gain of 0.15%.
Hong Kong’s Hang Seng index rose 0.27%, and mainland China’s CSI 300 increased 0.4%, though this snapped a four-day winning streak. The CSI 300 has experienced considerable growth this year, climbing over 13% year-to-date, prompting some analysts to express concerns about “irrational exuberance.”
“Sentiment is becoming excessively optimistic,” noted hao Hong, Managing Partner and CIO of Lotus Asset Management. Though, he cautioned that it’s “too early” to definitively label the market a bubble, adding, “Given the improving liquidity conditions and a dovish Fed, any correction will tend to be shallow and brief.”
US Markets advance Despite Political Uncertainty
Overnight in the United States, all three major benchmarks closed higher. The S&P 500 rose 0.41% to settle at 6,465.94, as investors appeared to look past president Donald Trump’s removal of Federal Reserve Governor Lisa Cook from the central bank’s board. Market participants are now focused on quarterly earnings reports, notably those of chip giant Nvidia.
The Nasdaq Composite added 0.44%, closing at 21,544.27, while the Dow Jones Industrial Average gained 135.60 points, or 0.30%, finishing at 45,418.07.
Context & Analysis:
The imposition of higher tariffs on India reflects ongoing trade tensions between the two countries, potentially impacting a range of Indian exports and adding to global economic uncertainty.The specific goods targeted by the tariffs were not detailed in the report.
China’s market rally, while impressive, is being closely watched by economists.The People’s Bank of China’s (PBOC) easing of monetary policy and increased liquidity are contributing factors, but the sustainability of the growth is being questioned. The PBOC has been implementing measures to stimulate the economy following a period of slower growth.
The potential deal between EssilorLuxottica and Nikon highlights the ongoing consolidation within the optics and imaging industries. EssilorLuxottica, formed through the merger of Essilor and Luxottica, is a dominant player in eyewear, and a larger stake in Nikon could provide access to advanced lens technologies and manufacturing capabilities.
The removal of Lisa Cook from the Federal Reserve board by President Trump adds another layer of political uncertainty to the US economic landscape. Cook, a prominent economist, was the first Black woman to serve on the Federal Reserve Board. Her departure could shift the balance of power within the central bank and potentially influence future monetary policy decisions.
Reporting by CNBC’s Sean Conlon, Sarah Min and Christina Cheddar Berk.
