Investing.com-- Most Asian stocks jumped on Tuesday with Chinese shares rallying on optimism around more stimulus measures from the world’s second largest economy, while the Reserve Bank of Australia held interest rates steady, as expected.
China has committed to implementing more proactive fiscal stimulus measures and adopting moderately looser monetary policies in 2025, the government signaled during a Politburo meeting on Monday.
Optimism over Chinese stimulus saw Asian markets largely brush off a weak lead-in from Wall Street, as losses in technology shares dragged U.S. benchmarks off record highs. U.S. stock index futures were flat in Asian trade, ahead of key consumer price index inflation data for November, due on Wednesday.
China, Hong Kong shares rally, S. Korea stocks rebound
The Shanghai Composite index climbed 1.6% on Tuesday, while the Shanghai Shenzhen CSI 300 index jumped more than 2%.
This optimism spread to other Asian markets as well, as regional investors were hopeful that China's measures to boost its sluggish economy will support global demand.
This comes at a time when fears of a possible U.S-China trade war have clouded the outlook for Asian economies, as incoming U.S. President Donald Trump has vowed to impose additional tariffs on Chinese exports.
The Hang Seng index surged 1.5% on gains in locally listed Chinese stocks.
Additionally, markets such as Japan and South Korea also showed signs of positive movement, reflecting broader regional optimism. Japan’s Nikkei 225 was up 0.2%, while TOPIX rose 0.3%.
South Korea’s KOSPI index rebounded 2.4% after sharp declines in the previous session. Investors looked past some fears surrounding an ongoing political crisis in the country, after a tumultuous week which saw South Korea's President Yoon Suk Yeol's failed attempt to impose martial law in the country.
Singapore’s FTSE Straits Times Singapore index gained 0.6%, and Philippine’s PSEi Composite index rose 0.5%, while India's Nifty 50 Futures indicated a slight dip at open.
RBA holds rates; Aussie miners jump on China stimulus cheer
The Reserve Bank of Australia held interest rates steady at a 12-year high of 4.35% in its December policy meeting on Tuesday, as expected, saying it needs to be convinced that inflation sustainably remains under the target range.
The decision comes despite Australia's economy recording a weak annual growth in the September quarter.
The RBA stated that its top priority is to bring inflation back to its target range of 2% to 3% annually. It also expressed growing confidence that inflation is gradually moving toward this target.
Australia’s S&P/ASX 200 were largely unchanged after the decision, and was last down 0.2%, as sharp gains in miners were countered by a slump in technology shares.
Miners were on the rise after China’s announcement, with mining giants like Rio Tinto Ltd (ASX:RIO), BHP Group Ltd (ASX:BHP), and Fortescue (ASX:FMG) surging between 4% and 7%, while tech shares plunged tracking overnight losses on the tech-heavy NASDAQ Composite index.