Nikkei 225 Index Hits 65,000. Chinese and Japanese Stocks Strengthen, Tech Stocks Remain Market Mainline

TradingKey - On May 25, major Asia-Pacific markets were generally strong, with Chinese A-shares and Japanese stocks standing out, while the South Korean market was closed for the Buddha's Birthday holiday. The market's main themes today were twofold: first, positive signals from US-Iran negotiations, easing investor concerns over energy prices and geopolitical escalation; second, concentrated capital inflows into tech growth sectors such as AI, semiconductors, and memory chips.

Regarding the Chinese market, the three major A-share indices closed higher. The Shanghai Composite Index rose 0.96% to 4,152.57; the Shenzhen Component Index gained 1.66% to 15,856.61; and the ChiNext Index climbed 2.10% to 4,021.16. Combined turnover in Shanghai and Shenzhen exceeded 3.2 trillion yuan, a notable increase from the previous session, reflecting heating trading sentiment.

On the floor, the semiconductor value chain was the standout performer. Memory chips, advanced packaging, and computing hardware surged across the board, with chip stocks like SMIC, Hua Hong Semiconductor, and Dosilicon strengthening sharply, leading the STAR Market significantly higher. The strength in tech stocks reflects growing capital interest in domestic computing power, AI hardware, and semiconductor self-reliance. Conversely, sectors like oil and gas, batteries, PV, and chemicals were weak, highlighting continued capital fragmentation.

Nikkei 225 Trend Chart, Source: FUTUBULL

The Japanese market also showed strength. The Nikkei 225 Index closed above the 65,000 level for a record high, ending at 65,158.19, up 2.87%. The primary driver was rising optimism for a de-escalation in US-Iran tensions. A cooling Middle East situation and lower oil prices would alleviate cost pressures for Japanese firms and improve earnings expectations.

The South Korean market was closed today for the Buddha's Birthday holiday. In the previous session, the KOSPI index extended its rebound, with semiconductors, AI, and export-oriented sectors remaining the primary focus.

Overall, risk appetite in Asia-Pacific markets saw a clear recovery today. A-shares were bolstered by semiconductors and the STAR Market, while Japanese stocks hit records on geopolitical relief and oil price expectations. However, stock divergence in the A-share market remains pronounced, and Japanese stocks face profit-taking pressure at these highs. Investors will continue to monitor US-Iran negotiations, oil price trends, the AI/semiconductor cycle, and the impact of Fed policy expectations on global risk assets.