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Asia Stocks Inch Higher Amid US-China Trade Optimism and AI Chip Export Relief

Asian stock markets edged higher on Thursday as investors reacted to rising optimism over U.S.-China trade discussions and signs that the U.S. may ease restrictions on advanced AI chip exports. Gains were modest, however, as geopolitical tensions between India and Pakistan kept broader sentiment in check.

US-China Trade Talks in Spotlight

Markets were buoyed by confirmation that U.S. and Chinese officials will meet in Switzerland this week for renewed trade negotiations. While the meeting sparked hopes of de-escalation in the prolonged trade war, progress remains uncertain.

Shanghai Composite rose 0.1%
CSI 300 gained 0.4%

Despite the optimism, U.S. President Donald Trump stated he had no plans to scale back his steep 145% tariffs on Chinese imports, a key sticking point for Beijing, which insists tariffs must be reduced before meaningful talks can resume.

Asia Tech Stocks Rally on Chip Export Curbs Relief

Asian tech-heavy indices outperformed after reports indicated the U.S. could roll back Biden-era restrictions on exporting advanced AI chips.

Hong Kong’s Hang Seng climbed 0.9%
Japan’s Nikkei 225 advanced 0.4%
South Korea’s KOSPI rose 0.3%

Chip suppliers rallied:

TSMC (TW:2330) and SK Hynix (KS:000660) jumped between 0.5% and 1.5%
Advantest Corp. (TYO:6857) surged 2.8%
Chinese tech giants Alibaba (HK:9988) and Tencent (HK:0700) also rose, anticipating improved access to U.S. chip technology

Wall Street Leads, But Fed Uncertainty Looms

S&P 500 and Nasdaq 100 futures climbed 0.5% and 0.7%, respectively, as tech gains on Wall Street lifted global sentiment. Trump hinted at a potential major trade deal with the UK, adding to risk-on appetite.

However, investor caution persisted ahead of the Federal Reserve’s policy announcement, with the central bank warning of heightened trade and economic risks.

India-Pakistan Tensions Keep Markets Cautious

Military escalation between India and Pakistan raised geopolitical concerns:

India conducted strikes on alleged terrorist targets
Pakistan responded with cross-border artillery fire and claimed to have downed five Indian aircraft

Despite tensions, India’s Nifty 50 futures gained 0.5%, signaling resilience.

Other Regional Highlights

Australia’s ASX 200 added 0.2%, dragged down by:
- ANZ Group (ASX:ANZ) falling 3% on soft earnings
- Westpac (ASX:WBC) sliding 5% post ex-dividend
Singapore’s Straits Times Index dipped 0.2%
Japan’s TOPIX also declined 0.2%

Conclusion

Asia’s markets showed cautious optimism as traders weighed U.S.-China trade signals, easing AI chip restrictions, and heightened India-Pakistan military tensions. Investors now turn their attention to the Federal Reserve’s interest rate decision, which could steer global market direction for the remainder of the week.

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Hamza Shah