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Most Asian stock markets saw gains on Tuesday, with Japan’s Nikkei hitting a record high and shares in Sydney also reaching new peaks following the Reserve Bank of Australia’s (RBA) widely anticipated rate cut. Meanwhile, U.S. stock index futures remained largely unchanged in Asian trading.
RBA Cuts Rates by 25bps, Stocks Reach Record High
The Reserve Bank of Australia (RBA) reduced its interest rates by 25 basis points to 3.60% on Tuesday, marking the central bank’s third rate cut this year. The decision came after weaker-than-expected inflation data and signs of a cooling labor market, prompting the RBA to signal further rate cuts if inflation remains subdued. The move was in line with market expectations, and Australian stocks reacted positively, with the S&P/ASX 200 index climbing 0.3% to a fresh record high of 8,870.10 points.
Nikkei Soars on U.S.-China Tariff Truce Extension
In Japan, the Nikkei 225 surged 2.8% to a new record of 42,992.55 points, driven by optimism following the extension of the U.S.-China tariff truce. The U.S. and China agreed on Monday to extend their tariff truce for another 90 days, avoiding the imposition of additional sharp duties that could have disrupted trade. The agreement, which preserves current U.S. and Chinese tariffs of 30% and 10%, respectively, provides more time for negotiations, lifting investor sentiment across the region.
The broader TOPIX index also rose 1.8%, with strong performances in technology stocks, tracking gains in the tech-heavy Nasdaq Composite index.
Other Asian Markets React Positively
- In China, the Shanghai Composite gained 0.4%, while the Shanghai Shenzhen CSI 300 rose 0.5%.
- South Korea’s KOSPI index advanced 0.7%, buoyed by positive sentiment across the region.
- India’s Nifty 50 futures rose 0.3%, reflecting optimism following positive developments in global trade.
- The Philippines’ PSEi Composite rose 0.6%, while Indonesia’s Jakarta Stock Exchange Composite Index jumped 0.8%.
However, Hong Kong’s Hang Seng index edged 0.1% lower, and Singapore’s Straits Times Index fell 0.2% despite a strong second-quarter GDP print and an upward revision of the country’s 2025 GDP forecast.
As markets continue to digest the tariff truce and the global monetary policy outlook, investor sentiment remains cautiously optimistic.
