In a buoyant start to the trading day, Asian markets rallied as technology stocks surged ahead of highly anticipated U.S. earnings announcements. Investors across the region were drawn to the optimism surrounding global economic prospects, which were further bolstered by resilient growth in key economies.

The soaring technology sector emerged as the driving force behind the impressive gains across Asian stock exchanges. With major U.S. tech giants like Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) gearing up to release their earnings reports, market sentiment was significantly influenced by the strong performance of tech behemoths Microsoft Corporation (NASDAQ:MSFT), Meta Platforms Inc (NASDAQ:META), and Alphabet Inc (NASDAQ:GOOGL) last week. The positive results from these industry giants have set a promising tone for the upcoming earnings season.

Investors were further encouraged by a favorable outlook on global economic conditions. Reports of easing inflation and steady growth in major economies fueled confidence in risk-heavy stocks, prompting capital inflows into the Asian markets.

South Korea’s KOSPI index led the charge, surging over 1%, largely driven by the strength of heavyweight chipmaking stocks. Samsung Electronics Co Ltd (KS:005930) saw a 1.2% rise in its shares after Western Digital Corporation (NASDAQ:WDC), a U.S. memory chip maker, assured that the worst was over for the industry. Despite Western Digital forecasting a bigger-than-expected quarterly loss and revenue drop, the positive sentiment surrounding the memory chip sector prevailed.

Similarly, internet giants Alibaba Group Holding Ltd (HK:9988) (NYSE:BABA), Tencent Holdings Ltd (HK:0700), and Baidu Inc (HK:9888) (NASDAQ:BIDU) propelled the Hang Seng index, compensating for losses in other sectors. However, property developer Country Garden (HK:2007) faced a setback, sliding over 5% after abandoning a planned $300 million capital raise.

Taiwan’s Weighted index saw modest gains, and Japan’s Nikkei 225 index rose 0.6% primarily due to robust performances in automobile and tech stocks. The market sentiment in Japan received additional support from the Bank of Japan’s emergency bond buying, signaling a lack of immediate plans for policy tightening.

Indian investors observed a cautious approach as futures for India’s Nifty 50 index suggested a flat opening. However, the overall optimism in the market remained strong, as both Indian indexes were inching closer to record highs, driven by robust performances of heavyweight tech stocks.

In contrast, Chinese stocks faced challenges on Tuesday. The Shanghai Shenzhen CSI 300 index recorded a marginal 0.1% gain, while the Shanghai Composite experienced a slight dip. These shifts were prompted by a private survey that revealed an unexpected contraction in China’s manufacturing sector during July. The findings echoed a similarly dismal official survey for the same month, indicating limited signs of economic recovery in China’s vital sectors.

The weak economic signals heightened expectations for additional stimulus measures from Chinese authorities, who promised policies aimed at boosting domestic consumption and economic activity. However, the lack of specific details on these policies instilled a sense of caution among investors regarding local stocks.

Despite the recent surge in Chinese stocks driven by the prospect of stimulus, momentum appears to be slowing down as uncertainty prevails.

Overall, the positive gains across Asian markets, particularly in the technology sector, have set the stage for an exciting week ahead as investors eagerly anticipate major U.S. earnings reports and monitor global economic trends closely.