Investing.com-- Most Asian stocks rose on Tuesday, shrugging off threats of increased U.S. trade tariffs as comments from President Donald Trump suggested that Washington remained open to more negotiation.
Focus was squarely on a Reserve Bank of Australia interest rate decision, with the central bank widely expected to cut interest rates further. Australian markets were on edge before the decision.
Asian stocks were strong despite a weak overnight lead-in from Wall Street, as Trump began sending letters to major economies outlining U.S. tariffs against them. But the president extended his deadline to impose his tariffs to August 1 from July 9, and also signaled that he remained open to talks.
Wall Street futures fell in Asian trade, but curbed their losses after Trump’s comments. S&P 500 Futures were down 0.1% after losing as much as 0.3%.
KOSPI rises, Nikkei flat after Trump flags 25% tariffs
South Korea’s KOSPI rose 0.7% on Tuesday, while Japan’s Nikkei 225 index curbed early gains to trade flat. The TOPIX index fell slightly.
The KOSPI was boosted by an over 2.5% jump in memory chip giant SK Hynix Inc (KS:000660), which rose after rival Samsung Electronics Co Ltd (KS:005930) forecast a substantially weaker than expected operating profit for the second quarter. Samsung’s shares fell about 1%.
Trump on Monday released letters outlining 25% tariffs against Seoul and Tokyo, and also unveiled tariff levels for a host of other Asian and African countries.
Malaysia will also face a 25% tariff, while Thailand was slapped with a 36% levy. Indonesia faces 32% tariffs.
Malaysian stocks fell 0.7%, while Indonesian stocks shed 0.2%.
The tariffs will be effective from August 1, Trump said, pushing forward an earlier July 9 deadline. But the president later told reporters that he was not a “100% firm” on the August 1 deadline, and that he was open to alternate proposals amid ongoing trade talks.
These comments, coupled with Trump’s postponement of his July 9 deadline for the tariffs, sparked hopes that more countries will reach trade deals with Washington, and that Trump will not eventually proceed with his steep tariffs.
Other Asian stocks were upbeat on this notion. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.3% and 0.2%, respectively, while Hong Kong’s Hang Seng index rose 0.3%.
Singapore’s Straits Times index added 0.1%.
Gift Nifty 50 Futures for India’s Nifty 50 index rose 0.1%, pointing to a positive open for the index. Focus was also on a New Delhi-Washington trade deal, which the White House said was close.
Australia flat, RBA rate cut in focus
Australia’s ASX 200 index fell 0.1%, with focus squarely on the RBA’s rate decision.
The central bank is widely expected to cut interest rates by 25 basis points to 3.60%, its third such cut this year after it began an easing cycle in February.
Expectations for a cut were furthered by signs of cooling Australian inflation and economic growth, especially in the face of increased trade headwinds.
But Westpac analysts warned that a July rate cut might not be as confirmed as markets were expecting, especially amid heightened uncertainty over the global economy.
Source: Investing