Divergent Asian markets…South Korea·Japan at record highs, India·Hong Kong in decline

Semiconductor stocks such as Samsung Electronics, TSMC, and Tokyo Electron all rise

President Donald Trump’s weekend announcement of new regulatory measures on H-1B visas led to declines in India and Hong Kong markets on the 22nd (local time), while Japan, South Korea, and Taiwan markets continued to rise led by tech stocks.

Japan’s Nikkei 225 index rose 0.99% that day to 45.493.66, again hitting a record high. Buyers flowed in on the view that the Bank of Japan’s (BOJ) weekend decision to sell ETFs would not have a major impact on the market, and large semiconductor-related stocks such as Tokyo Electron led the gains.

The Korean market saw the KOSPI rise 0.68%, again hitting a record high, as Samsung Electronics surged 4.77%. That day Samsung Electronics jumped on news that its HBM (High Bandwidth Memory) HBM3E 12-layer product is highly likely to pass NVIDIA’s quality testing and on a Morgan Stanley report that raised its price target by 12% expecting DRAM prices to rise.

The Taiwan Taiex index also set an all-time high, rising 1.1% on expectations of US and Chinese AI infrastructure investment. TSMC shares rose 1.4% that day, hitting an all-time high.

India’s benchmark index fell 0.2% that day. After the Trump administration announced over the weekend that companies would be required to pay $100,000 when hiring new H-1B workers, Indian IT firms were expected to be hit hard. Infosys and Tata Consultancy Services and others in India’s IT outsourcing sector earn more than half of revenues totaling 283 billion dollars (about 394 trillion won) from the US.

US markets were showing declines before the open, with S&P futures down 0.3%, Nasdaq futures down 0.4%, and Dow futures down 0.3% that day. Europe’s broad STOXX 600 index fell 0.3% in the morning session.

Kyle Rodda, chief financial analyst at Capital.com, said the Trump administration’s sharp increase in H-1B visa fees "could pose a risk to the operating costs and margins of US tech companies that have relied on overseas talent due to a domestic tech labor shortage."

On the macroeconomic front, investors expect two interest rate cuts at the remaining two policy meetings this year after the Fed hinted at gradual rate cuts going forward.

Several Fed policymakers are expected to speak this week. On Friday (26th), the Fed’s preferred inflation gauge, the August Personal Consumption Expenditures (PCE) data, will be released.

According to Tony Sycamore, a market analyst at IG, the core PCE price index is expected to rise 0.2% month-on-month. As a result, the annualized increase will remain at 2.9%, the same as in July, and higher than the 2.6% low recorded in April.

The dollar index, which measures the value of the US dollar against six other currencies, rose 0.09% to 97.814. The index has fallen nearly 10% year-to-date, with much of the decline occurring in the first half of 2025.

Last weekend the Bank of Japan decided to keep rates unchanged despite two members advocating rate hikes. As a result, the yen was slightly weaker at 148.20 yen per dollar.

Vasu Menon, Executive Director of Investment Strategy at OCBC Bank, said that nevertheless the signal that the Bank of Japan is gradually shifting toward rate hikes has become clearer and the market will perceive it that way. He added, "In the short term the yen may strengthen, which may not be good news for Japanese stocks and bonds."

Kim Jeong-a, guest reporter kja@hankyung.com