On Tuesday, Asia-Pacific markets experienced a notable uptick, driven by a significant monetary policy decision from China. The People's Bank of China announced a reduction in its key lending rates by 10 basis points, aiming to stimulate economic growth amidst ongoing trade tensions that threaten to derail progress. This strategic move saw the 1-year loan prime rate trimmed from 3.1% to 3.0%, while the 5-year loan prime rate was lowered from 3.6% to 3.5%.
In response to this announcement, Hong Kong's Hang Seng index rose by 1.28%, showcasing strong investor confidence. Meanwhile, mainland China's CSI 300 index recorded an increase of 0.48%. Japan's benchmark Nikkei 225 climbed 0.45%, and the Topix index gained 0.32%. South Korea's Kospi also saw a rise of 0.29%, while the smaller Kosdaq index jumped 0.62%. Additionally, Australia's benchmark S&P/ASX 200 increased by 0.39%, as investors anticipate further economic developments.
Later in the day, the Reserve Bank of Australia (RBA) is expected to announce its policy rate decision. With Australia's inflation easing, the latest headline inflation rate has fallen to a four-year low of 2.4% in the first quarter of 2025. In its previous monetary policy statement, the RBA emphasized that maintaining inflation within its target range of 2% to 3% sustainably is its highest priority. Analysts from the Commonwealth Bank of Australia predict that the RBA will lower the cash rate by 25 basis points to 3.85%.
Investors are also closely monitoring the performance of Contemporary Amperex Technology, the world's largest battery manufacturer, which saw its shares soar by over 11% during its trading debut in Hong Kong. The company's shares were priced at 292 Hong Kong dollars on the Hong Kong stock exchange, a significant increase from its initial public offering price of HK$263 per share.
Meanwhile, U.S. stock futures showed minimal change with S&P 500 futures rising by less than 0.1%. In contrast, Nasdaq 100 futures dipped by 0.1%, while futures linked to the Dow Jones Industrial Average added 54 points, equivalent to 0.14%. On the previous trading day, major U.S. indices closed higher, with the S&P 500 marking a slight gain of 0.09% and ending at 5,963.60, achieving its sixth consecutive winning session. The Nasdaq Composite inched up by 0.02%, closing at 19,215.46, while the Dow Jones Industrial Average rose by 137.33 points, or 0.32%, finishing at 42,792.07. This increase was bolstered by a rebound in UnitedHealth, which saw an impressive 8% rise after a recent sell-off.
This analysis highlights the interconnected nature of global markets, particularly as China's monetary policy continues to influence investor sentiment across the Asia-Pacific region and beyond.
