(Sharecast News) - Asia-Pacific equity markets rose broadly on Tuesday, with several benchmarks posting sharp gains as investors welcomed signs of easing trade frictions after US president Donald Trump said Washington and New Delhi had struck a trade deal.
Regional sentiment was also supported by gains on Wall Street, while investors continued to monitor gold and silver prices following recent volatility.
"Asian markets bounced back strongly after experiencing their steepest decline in over two months," said Patrick Munnelly, market strategy partner at TickMill, adding that "technology stocks led a spirited rally" as risk appetite improved.
He noted that the MSCI Asia Pacific Index "soared 2.8%, marking its best single-day performance since April," reflecting the strength of the rebound following recent turbulence.
Trump said the US and India would immediately begin cutting tariffs on each other's goods, adding in a Truth Social post that Indian prime minister Narendra Modi had agreed to step up purchases of US products.
Under the agreement, India would also halt purchases of Russian crude oil and instead buy more from the US, and potentially Venezuela, according to Trump.
Munnelly said Indian equities climbed 2.8% after Trump announced plans to lower tariffs on Indian goods to 18%, noting that the decision came after Modi committed to halting purchases of Russian energy, "helping to ease tensions between the two nations," while the Indian rupee also strengthened against the US dollar.
Tokyo, Seoul lead regional rally
Japanese equities led the regional rally, with the Nikkei 225 surging 3.92% to a record high of 54,720.66, while the Topix advanced 3.1% to 3,645.84.
Gains were broad-based, with Sumitomo Electric Industries jumping 12.51%, Komatsu rising 11.85% and TDK Corporation adding 11.43%.
The advance echoed Munnelly's view that technology stocks were at the forefront of the rebound across the region.
Chinese markets also moved higher - the Shanghai Composite climbed 1.29% to 4,067.74, with Metro Investment Development up 10.1%, Beijing Urban Construction Investment & Development gaining 10.09% and Tellhow Sci-Tech rising 10.04%.
The Shenzhen Component outperformed, advancing 2.19% to 14,127.10.
Hong Kong equities posted more modest gains, with the Hang Seng Index edging up 0.22% to 26,834.77.
CSPC Pharmaceutical Group rose 8.09%, New Oriental Education and Technology gained 6.4% and Zijin Mining Group advanced 4.55%.
However, Munnelly cautioned that "not all sectors shared in the optimism," noting that Chinese internet companies declined amid concerns over potential increases in value-added tax, which "cast a shadow over the broader tech rally in the region."
South Korean stocks saw a sharp rebound, with the Kospi 100 jumping 7.61% to 5,984.21.
Hanwha Systems surged 28.63%, Mirae Asset Daewoo Securities climbed 24.72% and LS Industrial Systems rose 16.35%.
Munnelly described South Korea as a standout performer and "a key player in the AI sector," highlighting that the country's stock market jumped 6.3% on the day, with Samsung and SK Hynix among the top gainers, climbing 10% and 7.3% respectively.
The rally came alongside softer inflation data, with consumer inflation falling to a five-month low of 2% year-on-year in January, down from 2.3% in December and below the 2.1% increase economists had expected.
On a monthly basis, consumer prices rose 0.4%, compared with forecasts for a 0.5% rise, while core CPI increased 2.0% year-on-year and 0.5% month-on-month.
The Bank of Korea had said it expected inflation to average 2.1% in 2026.
Sydney in the green after RBA rate hike
Australian shares rose after the Reserve Bank of Australia raised its policy rate by 25 basis points to 3.85%, marking its first rate hike since November 2023.
The S&P/ASX 200 gained 0.89% to 8,857.10, with DroneShield up 7.83%, L1 Long Short Fund rising 5.81% and Newmont Corporation adding 5.64%.
Munnelly noted that Australian bonds declined following the decision, while the move also "pushed the Australian dollar higher" as the central bank acted to combat inflation.
The hike matched expectations from economists polled by Reuters, as policymakers continued to push back against near-term rate-cut expectations amid elevated inflation.
In New Zealand, the S&P/NZX 50 edged up 0.07% to 13,421.52.
Fisher & Paykel Healthcare rose 2.77%, Heartland Group gained 2.48% and A2 Milk Company advanced 2.43%.
Gold and silver rebound, currency markets mixed
Precious metals rebounded sharply after recent volatility, with Munnelly noting that gold prices "shot up by as much as 4.2%, while silver surged 8.1%," recovering some ground after a sharp selloff that had dragged prices down from record highs.
He said the moves followed Monday's market turbulence, as investors returned to the sector.
Currency markets were mixed, with the dollar strengthening against the yen but weakening versus the Australian and New Zealand dollars.
The greenback was last up 0.22% on the yen to trade at JPY 155.97, while it fell 0.8% against the Aussie to AUD 1.4278 and declined 0.53% on the Kiwi to change hands at NZD 1.6579.
Oil prices were little changed, with Brent crude futures last down 0.06% on ICE at $66.26 a barrel, and the NYMEX quote for West Texas Intermediate up 0.05% at $62.17.
Reporting by Josh White for Sharecast.com.
26.97 (0.26%)
0.00