Asian stock markets demonstrated volatility before concluding with mixed results on Tuesday, despite a robust rally on Wall Street the previous night.
Investors deliberated on a potential rate reduction in September following remarks from Fed Chair Jerome Powell, who noted that three inflation readings over the second quarter indicated "more progress."
With the likelihood of a Trump presidency rising, the market also considered the "Trump Trade" concept, which suggests deregulation, tax reductions, and augmented fiscal spending.
The dollar rebounded after a bout of losses, gold neared record highs, and oil prices continued to decline due to concerns about Chinese demand.
China’s Shanghai Composite Index inched up slightly to 2,976.30, while Hong Kong’s Hang Seng Index dropped 1.60 percent to 17,727.98 amidst apprehensions about escalating geopolitical tensions if Donald Trump were to win the presidency again in November.
Japanese markets ended slightly positive, with the Nikkei Average gaining 0.20 percent to 41,275.08 as traders resumed activity after a holiday. The broader Topix Index closed 0.34 percent higher at 2,904.50. A weaker yen benefited export-oriented shares, and defense-related stocks saw significant boosts, with Mitsubishi Heavy Industries and Kawasaki Heavy Industries rising by 5 percent and 6.2 percent, respectively. Electronic components maker TDK soared by 5.4 percent, while Uniqlo parent Fast Retailing declined by 1.3 percent.
In Seoul, stocks recorded modest gains, with the Kospi Index up 0.18 percent to 2,866.09.
Australian markets finished lower as investors anticipated June employment data for further direction. The benchmark S&P/ASX 200 slipped 0.23 percent to 7,999.30, breaking a three-day winning streak, while the broader All Ordinaries Index decreased by 0.23 percent to 8,243.30. Banks edged up slightly, extending a six-day gaining streak, but mining stocks faltered after Rio Tinto reported second-quarter iron ore shipments below analyst expectations. Rio Tinto shares dropped 2.5 percent, hitting their lowest level since March 18 earlier in the trading session, and BHP shares fell by 1.4 percent.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 Index increased by 0.51 percent to 12,184.49, ahead of second-quarter inflation data set to be released on Wednesday, which could impact the central bank's monetary policy.
In the U.S., stocks closed on a strong note, with two of the three major indices reaching new highs. This optimism was fueled by expectations of Federal Reserve interest rate cuts and improved prospects for former President Donald Trump in the upcoming presidential elections. The Dow Jones gained 0.5 percent, the S&P 500 edged up by 0.3 percent, and the tech-heavy Nasdaq Composite increased by 0.4 percent, despite data indicating a continued decline in manufacturing activity in New York state.
