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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.
Australian markets lagged, deepening their intraday losses slightly after the Reserve Bank of Australia unexpectedly left interest rates unchanged, citing uncertainty over domestic inflation and international trade.
Broader 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 flat after losing as much as 0.3%.
KOSPI, Nikkei rise even as Trump flags 25% tariffs
South Korea’s KOSPI surged 1.5% on Tuesday, while Japan’s Nikkei 225 index added 0.3%. The TOPIX index also added 0.1%.
The KOSPI was boosted by an over 3% 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 0.7% and 0.6%, respectively, while Hong Kong’s Hang Seng index rose 0.7%.
Singapore’s Straits Times index added 0.5%.
India’s Nifty 50 index lagged, trading sideways with focus largely on a New Delhi-Washington trade deal, which the White House said was close.
Australia’s ASX 200 falls after RBA keeps rates unchanged
Australia’s ASX 200 index fell 0.2%, slightly deepening losses after the RBA left interest rates unchanged at 3.85%.
The central bank largely ducked expectations that it would cut rates by 25 basis points for a third time this year, with the central bank stating that it could afford to wait a bit longer to confirm that inflation was cooling in line with expectations.
The RBA also flagged increased uncertainty over U.S. trade policy, but said that it appeared unlikely that the worst-case scenario would come to pass.
Still, markets were caught off guard by the RBA’s hold, as cooling inflation and sluggish economic activity kept traders largely biased towards more monetary easing.