Asia-Pacific markets edged up on Tuesday as U.S. President Donald Trump announced that Washington and India had reached a trade agreement and would immediately commence reducing tariffs on each other’s goods.
Trump claimed that the Indian Prime Minister Narendra Modi had agreed to increase purchases of U.S. products, as indicated by a post on Truth Social on Monday after the two leaders had a call.
Trump stated that as part of the deal, India will also cease to buy Russian crude oil and instead a larger portion of it will be purchased in the U.S, and possibly, Venezuela.
The Indian Nifty 50 added almost 5 percent in the opening. It rose 2.73 percent, while the Sensex index gained 2.66 percent. The Nikkei 225 of Japan increased by over 3 percent to an all-time high, and the Topix increased by 2.34 percent.
The Kospi of South Korea surged by more than 5 percent, leading to a buy-sidecar, which puts a temporary stop to the purchase orders. The Korea Exchange reported that the trigger happened when KOSPI 200 futures rose by over 5 percent within a period of one minute.
A sidecar was also active on the sell side after the Kospi 200 futures slipped 5 percent. Therefore, the small-cap Kosdaq surged 2.59 percent. The Hang Seng Index of Hong Kong rose 0.48 percent, and the mainland had an index of CSI 300 of 0.75 percent.
However, Australia’s S&P/ASX 200 jumped 1.3 percent. The central bank of Australia increased its policy rate by 25 basis points to 3.85 percent on Tuesday, in what is the first rate rise by the Reserve Bank of Australia since November 2023, due to the fact that inflation has remained high.
The decision by the Reserve Bank of Australia was in accordance with the estimates made by Reuters and came after the inflation rate was recorded to be the highest in six quarters.
Senior RBA officials have repeatedly insisted against expectations of rate cuts. Earlier this year, Reserve Bank of Australia Deputy Gov. Andrew Hauser indicated that the probability of a near-term rate reduction was likely to be very low due to continuing high inflation rates. The central bank has an inflation target of 2.5 percent.
The investors will keep a watch on the gold and silver prices after recent volatility that saw silver prices falling up to 30 percent last Friday, the worst single-day performance of the metal since 1980. The gold also slipped almost 10 percent.
Spot gold increased by approximately 2.22 percent to $4,769.33 per ounce, and silver increased by approximately 3.81 percent to $82.39 per ounce.
In the U.S., the equities increased overnight when Wall Street started a new month of trading, and investors ignored the recent losses in silver and bitcoin.
The Dow Jones Industrial Average gained 1.05 percent, closing at 49,407.66, while the S&P 500 was up 0.54 percent and settled at 6,976.44. The Nasdaq Composite also advanced 0.56 percent and ended at 23,592.11.
