Chinese equities outperformed peers as technology shares recovered from Monday’s selloff

Asian stocks traded mostly higher on Tuesday as investors cautiously returned to technology shares after the sharp AI-driven rout through July, while stronger Australian equities helped offset declines in Japan and Hong Kong.

Chinese equities outperformed peers as technology shares recovered from Monday’s selloff. The Shanghai Shenzhen CSI 300 gained 0.6%, while the Shanghai Composite was little changed.

Technology stocks regained ground after sharp losses a day earlier. Foxconn Industrial Internet climbed more than 4%, BOE Technology added over 2%, SMIC rose nearly 1.5%, Iflytek climbed 1.6%, while Luxshare Precision jumped 1.5%.

Hong Kong technology shares were mixed after Alibaba unveiled its largest artificial intelligence model yet. The company said its new Qwen3.8-Max model outperformed Anthropic’s Fable 5 and Moonshot’s Kimi K3 on several benchmarks while offering substantially lower costs. Hang Seng index shed 0.6%.

Alibaba shares gained around 0.7% after rallying more than 7% on Monday. Tencent slid nearly 1%, while Xiaomi shed over 2%.

KOSPI trimmed early losses to trade 0.3% lower after tumbling more than 5% on Monday. Samsung Electronics was little changed, while SK Hynix edged 0.4% higher as chipmakers stabilized following heavy selling.

Citi analysts said the recent AI-driven correction had left positioning sharply divided across Asia, with the KOSPI remaining in deeply bearish territory while Hong Kong continued benefiting from short covering. The bank said sentiment could improve further if confidence in the AI theme stabilizes.

Japan remained under pressure. The Nikkei 225 dropped 0.6%, while the TOPIX slid 0.6%. Kioxia Holdings slipped around 3%, but Murata Manufacturing declined nearly 3%, while Sony and TDK also traded lower.

STI advanced 0.2%, supported by financial stocks.

S&P/ASX 200 outperformed peers, gaining nearly 1% as lithium miners rallied and stronger commodity-related shares offset weakness elsewhere.

Pilbara Minerals added more than 3%, Liontown Resources rose over 5%, Core Lithium gained 5%, while European Lithium soared around 10%.

Attention now turns to the Reserve Bank of India, which is widely expected to leave interest rates unchanged later on Wednesday. Nifty 50 Futures were little changed after the benchmark index jumped 1.6% in the previous session.

South Korea reported consumer inflation slowed to a three-month low in July as lower oil prices eased price pressures, although markets continue to see the possibility of another rate increase later this month after the Bank of Korea’s surprise hike in July.