Key Points

• Asia Markets Gain Despite Tariff Concerns: Regional equities closed higher as investors weighed Trump’s new semiconductor tariff threat, while Honda profits halved on U.S. auto duties.
• RBI Holds Rates, Cuts Inflation Outlook: India’s central bank maintained its 5.5% policy rate, kept GDP growth at 6.5%, and lowered its inflation forecast to 3.1% amid U.S. tariff pressure and resilient domestic growth.
• OpenAI Eyes $500B Valuation in Share Sale: The AI leader is in early talks for a secondary share sale that could value it at $500B, following rapid revenue growth and the release of new open-weight models.
• Cathay Pacific Expands Boeing Fleet: The carrier ordered 14 Boeing 777-9 jets after posting H1 profit growth to HK$3.65B, buoyed by strong passenger demand and lower fuel costs.

Asia Stocks Rise Despite Tariff Jitters; Honda Profit Slumps

Asian equities ended mostly higher Wednesday as investors weighed weaker U.S. economic data, renewed tariff threats from President Donald Trump, and mixed corporate earnings. Japan’s Nikkei 225 rose 0.6% and Australia’s ASX 200 gained 0.84%, while China’s CSI 300 added 0.24% and South Korea’s Kospi closed flat. Trump signaled forthcoming semiconductor tariffs to boost domestic production, adding trade policy uncertainty.

Honda Motor’s quarterly operating profit halved, missing estimates as U.S. auto tariffs and a stronger yen hit margins.

India RBI Holds Rates at 5.5% Amid Tariff Pressures, Cuts Inflation Outlook

India’s central bank kept its policy rate unchanged at 5.5%, in line with expectations, following June’s aggressive 50-basis-point cut. Governor Sanjay Malhotra cited resilient domestic growth but flagged external headwinds from rising U.S. tariff threats and global trade uncertainty. The RBI maintained its GDP growth forecast at 6.5% for FY26 while lowering its inflation projection to 3.1% from 3.7%, noting a more benign near-term outlook.

Markets reacted mildly, with the Nifty 50 down 0.18% and the rupee strengthening to 87.72 per dollar. Analysts expect the central bank to remain on pause, with scope for a rate cut later in 2025.

OpenAI Eyes $500 Billion Valuation in Potential Secondary Share Sale

OpenAI is in early discussions with investors, including Thrive Capital, for a potential secondary share sale valuing the company at around $500 billion. The transaction would allow current and former employees to sell shares, following a March funding round led by SoftBank at a $300 billion valuation. The AI leader, which recently launched two open-weight language models as lower-cost options for developers, projects annual recurring revenue to surpass $20 billion by year-end.

ChatGPT is approaching 700 million weekly active users, while rival Anthropic is also seeking substantial new funding at a sharply higher valuation.

Cathay Pacific Orders 14 Boeing 777-9 Jets as H1 Profit Climbs

Cathay Pacific Airways has agreed to purchase at least 14 Boeing 777-9 aircraft, with options for seven more, as it reported a first-half 2025 underlying profit of HK$3.65 billion ($460 million), up from HK$3.37 billion a year earlier. Revenue rose to HK$54.31 billion, driven by strong passenger demand in China and Asia alongside lower fuel costs. The airline plans to expand flights and destinations despite short-term challenges for its low-cost unit, HK Express.

The Boeing deal follows improved China-U.S. trade relations after recent tariff reductions, with Cathay declaring an interim dividend of HK20 cents per share.

Conclusion

Global markets are navigating a complex mix of policy shifts, trade tensions, and corporate developments. Asia’s resilience amid fresh U.S. tariff threats underscores selective investor confidence, while India’s RBI signals a cautious stance with stable rates and lowered inflation expectations.

In the technology space, OpenAI’s potential $500B valuation reflects accelerating AI sector momentum, even as competition intensifies.

Meanwhile, Cathay Pacific’s fleet expansion highlights continued recovery in global travel demand, supported by easing China–U.S. trade frictions.

Investors should remain alert to shifting macroeconomic conditions, especially in trade policy and central bank actions, as these will shape near-term market direction and sector performance.

Investment Insights

• Tariff-sensitive sectors: Trump’s renewed focus on semiconductor-specific tariffs could disrupt supply chains and create short-term volatility in chip stocks, favoring U.S.-based producers over Asian peers.
• Monetary policy divergence: India RBI’s decision to hold rates at 5.5% while maintaining a neutral stance underscores the need for investors to monitor India’s trade negotiations with the U.S. as a key macro risk.
• Tech growth momentum: OpenAI’s potential $500 billion valuation and revenue acceleration highlight ongoing investor appetite for AI infrastructure and ecosystem plays, benefiting upstream hardware suppliers.
• Aviation recovery: Cathay Pacific’s Boeing 777-9 order signals strong Asia-Pacific travel demand, supporting long-term plays in aerospace manufacturing and regional airline equities.

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Disclaimer: This newsletter provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.