Asian stock markets are trading predominantly higher on Tuesday, following a broadly positive trend from Wall Street due to optimism around interest rates. This sentiment is driven by last week's tamer-than-expected U.S. inflation data. Notably, Asian markets had closed mostly lower on Monday.
Despite U.S. Federal Reserve officials predicting just one interest rate cut this year, traders are hopeful these forecasts may be overly conservative if inflation continues to decelerate in the coming months.
This week, central banks in Australia, Norway, and the U.K. are expected to hold their rates steady during monetary policy meetings. However, the Swiss National Bank (SNB) is anticipated to implement a 25 basis point rate cut.
Recovering losses from the previous two sessions, the Australian stock market is showing significant gains on Tuesday. The benchmark S&P/ASX 200 index is trading well above the 7,700 level, buoyed by positive cues from Wall Street and gains in gold miners, technology, and financial stocks.
The S&P/ASX 200 Index has increased by 72.70 points, or 0.94 percent, reaching 7,773.00, after hitting a high of 7,776.40 earlier. Meanwhile, the broader All Ordinaries Index is up by 66.40 points, or 0.84 percent, to 8,010.00. Australian stocks had closed modestly lower on Monday.
Among major miners, Rio Tinto and BHP Group are each up by 0.2 percent, whereas Mineral Resources has edged down by 0.2 percent. Fortescue Metals has declined by over 4 percent due to a $1.1 billion block trade at a 6 percent discount following Monday’s closure.
Oil stocks present a mixed picture, with Woodside Energy down by 0.1 percent, while Santos is up by 0.4 percent and Origin Energy has gained more than 1 percent. Beach Energy has fallen by 4.5 percent after announcing plans to cut spending, operational costs, and jobs in an effort to improve company performance post a strategic review.
In the tech sector, Appen has advanced by more than 3 percent, Zip has added over 2 percent, and WiseTech Global is up by more than 1 percent. Block, the owner of Afterpay, and Xero both gained almost 1 percent each.
Gold miners are mostly on the rise, with Gold Road Resources, Newmont, and Resolute Mining each gaining over 1 percent, while Evolution Mining is slightly up by 0.1 percent. Northern Star Resources has fallen by 0.5 percent.
Among major banks, Commonwealth Bank and National Australia Bank have each increased by over 1 percent, Westpac is up by 0.4 percent, and ANZ Banking has added almost 1 percent.
In economic news, the Reserve Bank of Australia (RBA) is set to conclude its monetary policy meeting on Tuesday, with expectations pointing towards leaving the benchmark lending rate unchanged at 4.35 percent.
On the currency front, the Australian dollar is trading at $0.661 on Tuesday.
Over in Japan, the stock market is significantly higher on Tuesday, regaining some of the sharp losses from the previous session. The Nikkei 225 has risen above the 38,500 level, driven by broadly positive cues from Wall Street and gains across most sectors, particularly index heavyweights and technology stocks.
The benchmark Nikkei 225 Index closed the morning session at 38,504.11, up 401.67 points, or 1.05 percent, after touching a high of 38,519.02 earlier. Japanese shares had ended significantly lower on Monday.
Market heavyweight SoftBank Group has dipped by 0.3 percent, while Uniqlo operator Fast Retailing is up almost 1 percent. Among automakers, Honda has nearly gained 2 percent, and Toyota has added almost 1 percent.
In the tech sector, Advantest is up almost 1 percent, while Screen Holdings and Tokyo Electron have each added almost 3 percent.
Within the banking sector, Mitsubishi UFJ Financial and Mizuho Financial have each edged down between 0.1 to 0.4 percent, while Sumitomo Mitsui Financial has edged up by 0.4 percent.
Major exporters are exhibiting mixed performance with Panasonic up almost 1 percent and Canon edging up by 0.2 percent; Sony and Mitsubishi Electric have each edged down between 0.1 to 0.3 percent.
Among other significant gainers, Dowa Holdings and TDK have surged over 7 percent each, while Nissan Chemical and Rakuten Group have gained more than 4 percent each. Mitsubishi Heavy Industries is up more than 3 percent, and companies like Konami Group, DeNA, Nintendo, Murata Manufacturing, Fujitsu, NEXON, JTEKT, Sumco, and Asahi Group are adding nearly 3 percent each.
Conversely, Mercari has fallen by almost 4 percent and Takeda Pharmaceutical is down over 3 percent.
In the currency market, the U.S. dollar is trading in the higher 157 yen range on Tuesday.In the broader Asian markets, stocks experienced gains with New Zealand, China, Hong Kong, Singapore, South Korea, Malaysia, and Taiwan all rising between 0.2% and 1.0%. Indonesia markets remained closed due to Eid-al-Adha.
In the United States, Wall Street began Monday with a lack of clear direction but saw significant upward momentum as the day progressed. Major indexes moved higher, with the Nasdaq and the S&P 500 setting new record closing highs.
Although the major averages retreated slightly from their peak levels by the end of the session, they maintained strong positive territory. The Nasdaq surged 168.14 points, or 1.0%, to close at 17,857.02. The S&P 500 climbed 41.63 points, or 0.8%, to finish at 5,473.23, and the Dow increased by 188.94 points, or 0.5%, closing at 38,778.10.
In Europe, the markets displayed mixed results. The U.K.'s FTSE 100 Index dipped slightly by 0.1%, whereas Germany's DAX Index rose by 0.4%, and France's CAC 40 Index advanced by 0.9%.
Crude oil prices reached a new six-week high on Monday, driven by optimistic energy demand forecasts. West Texas Intermediate (WTI) crude oil futures for July settled at $80.33 per barrel, marking an increase of $1.88, or approximately 1.25%, the highest closing price since April 29.
