Asian Markets Wrap | China dips, India gains with South Korea and Japan

10 Jul 2026 , 07:04 PM

Market Briefs

China | Shanghai Composite 3,996.16 | -40.43 | -1.00%

Shanghai gave back 1% on Friday, remaining below the 4,000 level as domestic inflation data released during the session reinforced investor concern about margin compression in China’s manufacturing sector. China’s producer price index rose 4.1% in June compared to a year earlier — the fastest pace since July 2022 — while consumer prices eased to 1.0%, their lowest in three months. The widening divergence between factory-gate inflation and consumer-level pricing signals that Chinese manufacturers are absorbing cost increases rather than passing them on, a structural squeeze on corporate margins that weighed on industrial and energy names through the session even as technology and consumer stocks attempted modest recoveries.

Japan | Nikkei 225 68,557.51 | +813.88 | +1.20%

Tokyo’s Nikkei 225 rose 1.2% to 68,557.73, with chip equipment maker Tokyo Electron adding 2.7%. The session’s standout performer was SoftBank Group, which jumped 10.7% after Japan’s Finance Minister Katayama said Tokyo would explore measures to encourage the country’s giant public pension fund — the Government Pension Investment Fund — to substantially increase its domestic asset holdings, a policy shift that would redirect enormous pools of capital into Japanese equities and bonds. All eyes remained on the Japanese yen, which hung around its lowest level in 40 years as traders kept watch for official intervention from Tokyo, last fetching 162.18 per US dollar, not far from the 1986 low of 162.84 hit the previous week.

South Korea | KOSPI 7,475.94 | +184.03 | +2.52%

South Korea’s KOSPI gained 2.5% to 7,475.94, recovering some of its losses from earlier in the week. SK Hynix raised $26.5 billion through its American Depositary Receipt offering on Nasdaq — the largest-ever listing by a foreign company in US history — with demand running at seven times the available shares. The stock’s Korean shares fell 0.3% in Seoul on listing day, a classic post-pricing consolidation as investors who had positioned for the IPO took profits on the domestic shares while simultaneously participating in the US debut. Samsung Electronics gained modestly alongside the broader chip rebound.

Hong Kong | Hang Seng Index (HSI) 24,175.13 | +144.94 | +0.60%

Hong Kong’s Hang Seng shed 0.7% to 24,030.18 on Thursday, with shares of Apple supplier Luxshare falling 1.6% in its trading debut. Friday’s session saw the index recover, gaining 0.60% as Chinese AI company Zhipu, or Z.ai, surged 11.3% after announcing it would raise approximately $4 billion through a share sale. The session’s recovery reflected improving regional sentiment as the chip rebound from Wall Street’s Thursday session filtered through to Hong Kong’s technology platform and AI-adjacent names.

India | Nifty 50 24,206.90 | +244.10 | +1.02%

Indian stocks continued Thursday’s positive move on broad-based buying amid strong Asian cues and a firm Wall Street close overnight, with the Sensex zooming 705 points and the Nifty 50 jumping over 200 points in midday trade. Nifty IT was the top sectoral gainer, rising 2.46%, followed by Nifty Consumer Durables which advanced 1.48% and Nifty Metal jumping 1.40%. Tech Mahindra was the top performer among the Nifty pack, rising 2.19%, with HCL Technologies and Infosys each gaining 2.10%, TCS rising 1.99%, and Hindalco advancing 1.97%. Nifty Pharma and Healthcare were the session’s laggards as defensive positioning unwound into the risk-on rally. Read more about Indian markets here.

 

Key News and Impact on India

1. SK Hynix Lists on Nasdaq — Largest Foreign Company Offering in US History

• SK Hynix raised $26.5 billion through its American Depositary Receipt offering — surpassing Alibaba’s US IPO as the largest ever by a foreign company — with the offering consisting of 177.9 million ADS at $149 each, and demand running at seven times the available shares.
• The offering secured indications of interest from three cornerstone institutional investors — Baillie Gifford Overseas, Coatue Management, and Situational Awareness Partners — with total potential subscriptions of up to $7 billion, with all proceeds allocated to expanding advanced memory chip production capacity and procuring critical semiconductor equipment.
• SK Hynix is the world’s largest supplier of dynamic random access memory and NAND memory, with sales surging at a 72% compound annual growth rate from 2023 to 2025, and first-quarter 2026 sales rising 198% year over year.

Impact on India: SK Hynix’s Nasdaq debut as the largest-ever foreign company listing in US history is a landmark event that Indian capital market policymakers and the Securities and Exchange Board of India will study with considerable interest. The $26.5 billion raise makes 2026 one of the largest years for equity offerings globally, with SpaceX’s $85.7 billion IPO, SK Hynix’s ADR listing, and Cerebras Systems’ semiconductor IPO all completing within weeks of each other. For India, the strategic lesson is one of capital market depth: SK Hynix’s ability to raise $26.5 billion in a single US offering reflects the unmatched liquidity and institutional appetite of American capital markets. India’s GIFT City international financial centre, which aspires to become a competing venue for Asian technology company listings, needs to demonstrate comparable depth if it is to attract the kind of dual-listing that SK Hynix has executed. The IFSCA’s ongoing work on depository receipt frameworks and cross-listing mechanisms for Indian and foreign technology companies takes on renewed urgency in the context of today’s SK Hynix milestone.

2. SoftBank Surges 10.7% — Japan’s GPIF Pension Reform Reshapes Domestic Asset Allocation

• Japan’s Finance Minister Katayama said Tokyo would explore measures to encourage the Government Pension Investment Fund to substantially increase its domestic asset holdings, a policy signal that triggered a sharp rally in Japanese equities and government bonds simultaneously.
• The 10-year Japanese Government Bond yield pulled back from a three-decade high and the yen firmed, both tied to the finance minister’s remarks, as markets priced in the potential for large-scale domestic bond purchases by the world’s largest pension fund.
• SoftBank, as a major domestic equity holding and Japan’s most prominent AI and technology investment vehicle, was the session’s primary beneficiary of the GPIF reallocation signal, with its 10.7% gain the largest single-stock contributor to the Nikkei’s 1.2% advance.

Impact on India: Japan’s GPIF pension reform signal is the most significant structural shift in Japanese domestic capital allocation in years — and it carries meaningful indirect implications for India. The GPIF, which manages approximately $1.5 trillion in assets, has historically allocated a significant portion of its foreign equity holdings to emerging markets including India. If the fund is directed to increase domestic asset holdings substantially, it would reduce the proportion available for international equity allocation — potentially including Indian equities. For FII flow watchers at the RBI and SEBI, a GPIF domestic reallocation would represent a structural rather than cyclical reduction in one of India’s most stable long-term foreign institutional investor sources. The yen’s firming on the news also has a positive dimension for India: a stronger yen reduces the competitive pressure from Japanese exports on Indian manufacturers in third-country markets, and reduces the carry trade dynamics that create Indian market volatility when yen positions unwind suddenly.

3. China PPI Hits 4.1% — Fastest Factory-Gate Inflation Since July 2022

• The Shanghai Composite traded lower even as China’s producer price index rose 4.1% in June compared to a year earlier, the fastest pace since July 2022.
• Consumer price inflation eased to 1.0% in June from 1.2% in May — its lowest in three months — creating a widening wedge between factory-gate and consumer-level inflation that points to a structural margin squeeze for Chinese manufacturers who cannot pass higher input costs through to end consumers in a soft domestic demand environment.
• The People’s Bank of China signalled during the week that it would maintain an accommodative monetary policy stance and step up financial support to boost domestic consumption, while acknowledging the imbalance between strong supply and weak demand — a policy position that seeks to address the consumption gap without further inflaming producer-side inflation.

Impact on India: China’s widening PPI-CPI divergence — producer prices rising at 4.1% while consumer prices ease to 1.0% — is a specific and important data point for Indian manufacturers who compete with Chinese goods in both domestic and export markets. When Chinese manufacturer margins are under pressure from rising input costs, Chinese exporters face a choice between absorbing the costs and maintaining market share, or raising prices and ceding ground to competitors. In sectors where Indian manufacturers compete with Chinese exporters — steel, chemicals, textiles, and electronics components — a Chinese margin squeeze scenario can create pricing opportunities for Indian producers if Chinese exporters choose to raise prices to protect margins. The PBOC’s commitment to maintaining accommodative policy also signals that Beijing will use credit and liquidity support to cushion the manufacturing sector’s margin pressure, which may delay any Chinese export price adjustment and limit the competitive opportunity for Indian producers.

4. Iran Contacts US Seeking New Deal — Oil Stabilises as Diplomacy Revives

• Donald Trump stated that Iran took the initiative to contact the US seeking to reach a deal, with the subsequent decline in oil prices boosting overall market sentiment — a significant development given that Trump had declared the ceasefire “over” just two days earlier on July 8.
• Brent crude futures were on track for a 5% rise for the week — their strongest weekly performance since early May — but at $76.03 per barrel, Brent has given up most of the gains it accumulated when the conflict began at the end of February.
• A US official said late Thursday that Washington remains committed to a resolution with Iran, with technical talks ongoing and regional mediators pushing to revive a nuclear deal.

Impact on India: Iran’s initiative in contacting the US for a new deal — just 48 hours after Trump declared the ceasefire “over” — is the most consequential diplomatic development for India’s energy economics since the MOU was signed on June 18. The pattern now established is one of rapid escalation followed by rapid de-escalation, with oil prices spiking and retreating in a compressed timeframe. For the RBI, this volatility pattern creates a specific forecasting challenge: the June CPI print will reflect the pre-escalation oil environment, while the July print will capture both the spike and potential re-easing — making it difficult to form a clear view of the inflation trajectory that would normally anchor rate-setting decisions. India’s Ministry of Petroleum and Natural Gas will be watching the weekend’s diplomatic developments closely, with the strategic petroleum reserve deployment decision likely contingent on whether the Iran-US contact this week produces a new interim agreement or another breakdown.

5. Chip Rebound Leads Asia — Wall Street’s Thursday Rally Sets the Week’s Recovery Tone

• Asian stocks rose sharply on Friday, led by chip and AI firms as investors brushed off concerns over the stalled recovery of energy supplies through the Strait of Hormuz, with tit-for-tat attacks escalating between the US and Iran.
• MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%, while Japan’s Nikkei climbed, South Korea’s KOSPI jumped, driven by a rise in Samsung and a surge in SK Hynix as investors bought into the recent sell-off in chipmakers.
• South Korea’s Kospi surged more than four percent on the chip-driven rebound, with heavyweight semiconductor, battery and steel names posting broad gains, confirming that the week’s extreme volatility — down 5.35% on Wednesday, up 2.52% on Friday — has not broken the structural bull case for Korean chip stocks.

Impact on India: The week ending July 10 has been one of the most instructive for Indian equity market participants in all of 2026. The pattern — geopolitical shock drives 2% Nifty decline, chip rebound and diplomatic revival drive 1% Nifty recovery within 48 hours — confirms two structural features of India’s current market character. First, the Nifty’s volatility is lower than peer Asian markets during geopolitical shocks because of its domestic consumption and banking orientation; India did not fall 5% like the KOSPI or 2% like the Nikkei on Wednesday. Second, India’s recovery is also more measured than the semiconductor-driven bounces in Seoul and Tokyo; a 1% Nifty gain on Friday against a 2.52% KOSPI gain reflects the same composition that cushioned the downside. For Indian investors, this is the week’s most useful takeaway: India’s index composition is functioning as a natural volatility dampener in a global market environment defined by AI hardware concentration risk and geopolitical oil price swings.