(Sharecast News) - Asia-Pacific markets advanced on Tuesday as investors responded positively to China's decision to cut its loan prime rates by 10 basis points, signaling efforts to support the economy amid mounting trade tensions.
Gains were broad-based across the region, with strong performances in pharmaceutical, tech, and industrial stocks.
"Global stocks have rallied recently, fuelled by optimism over easing trade tensions since US president Donald Trump imposed record-high tariffs on 2 April," said TickMill market strategy partner Patrick Munnelly.
"In Asia, investors are closely monitoring the outcomes of US trade discussions with India and Japan, following an earlier agreement with China to reduce tariffs, which boosted expectations.
"India is negotiating a three-phase trade deal with the US and aims to finalise a preliminary agreement before July, when Trump's counter-tariffs are set to take effect, according to informed sources."
Munnelly noted that in Japan, lead trade negotiator Ryosei Akazawa was preparing for a third round of talks with the US as early as this week.
"Additionally, Japan's finance minister announced plans for a bilateral meeting with US Treasury secretary Scott Bessent this week to address various issues, including currency matters, which contributed to the yen's appreciation.
"Elsewhere, Vietnam and the US began their second round of bilateral tariff discussions in Washington DC on Monday, with talks scheduled to continue through Thursday."
Markets in the green across the Asia-Pacific region
In Japan, the Nikkei 225 edged up 0.08% to 37,529.49, led by a 7.22% jump in Furukawa Electric and gains of over 5% in SMC Corporation and Fujikura.
The broader Topix rose marginally by 0.02% to 2,738.83.
China's Shanghai Composite added 0.38% to 3,380.48, while the Shenzhen Component rose 0.77% to 10,249.17, with Henan Ancai Hi-tech, Baoding Tianwei Baobian Electric, and Jilin Yatai Group all surging by more than 10%.
The Hang Seng Index in Hong Kong climbed 1.49% to 23,681.48, boosted by a 6.06% gain in CSPC Pharmaceutical and a 5.74% rise in Hansoh Pharmaceutical.
Xiaomi also advanced 4.68%.
South Korea's Kospi 100 gained 0.14% to close at 2,595.83, with LS Industrial Systems up 8.14%, and both Doosan Heavy and Hyundai Electric posting gains above 7%.
Australia's S&P/ASX 200 rose 0.58% to 8,343.30, supported by a sharp 11.33% rally in Technology One.
SkyCity Entertainment and Perenti Global also added over 4%.
In New Zealand, the S&P/NZX 50 gained 0.12% to 12,644.23, with Vector, Pacific Edge, and Meridian Energy all rising more than 3%.
In currency markets, the dollar was last down 0.26% on the yen, trading at JPY 144.48, while it gained 0.61% against the Aussie to AUD 1.5580, and advanced 0.17% on the Kiwi, changing hands at NZD 1.6890.
Oil prices were slightly weaker, with Brent crude futures last down 0.27% on ICE at $65.36 per barrel, and the NYMEX quote for West Texas Intermediate off 0.14% at $62.60.
China and Australia both lower interest rates
China and Australia both eased monetary policy on Tuesday, as policymakers responded to signs of slowing growth and softening inflation.
The People's Bank of China cut its key loan prime rates for the first time since October, trimming the one-year LPR to 3.0% from 3.1% and the five-year rate to 3.5% from 3.6%.
It came as Beijing stepped up efforts to support the economy amid renewed trade tensions.
In Australia, the Reserve Bank lowered its benchmark interest rate by 25 basis points to 3.85%, the lowest level since May 2023.
The decision, which met economists' expectations, reflects easing inflationary pressures, with headline inflation falling to a four-year low of 2.4% in the first quarter.
Australia's central bank reiterated its focus on returning inflation to its 2% to 3% target range, while noting uncertainty in the outlook.
Meanwhile, the Bank of Singapore upgraded its 12-month forecast for the yuan renminbi from 7.4 to 7.1 against the dollar, citing improved sentiment following a recent trade truce between the US and China.
In Japan, bond markets saw upward pressure, with the 40-year government bond yield climbing more than 10 basis points to a record 3.56%, and the 10-year yield rising to 1.529%.
The moves followed a brief surge in US long-term Treasury yields after Moody's downgraded the US credit rating late last week.
Reporting by Josh White for Sharecast.com.
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