Asia-Pacific markets moved higher on Tuesday following fresh stimulus moves from two major central banks in the region, as China and Australia both slashed key interest rates to support their slowing economies. The gains come as investors weigh the impact of global trade tensions and recent economic data.
China Trims Key Lending Rates
The People’s Bank of China (PBOC) lowered its benchmark 1-year loan prime rate (LPR) by 10 basis points to 3.0%, down from 3.1%, and reduced the 5-year LPR—a reference for mortgage and long-term business loans—to 3.5% from 3.6%. The move signals Beijing’s intention to stimulate credit growth and boost confidence as exports falter and domestic demand weakens under trade pressure.
Markets responded positively. The Hang Seng Index in Hong Kong surged 1.49%, closing at 23,681.48, while the CSI 300—which tracks large-cap stocks in Shanghai and Shenzhen—rose 0.57% to 3,899.37.
Australia Eases Policy Amid Cooling Inflation
Meanwhile, the Reserve Bank of Australia (RBA) reduced its cash rate by 25 basis points to 3.85%, its lowest level since May 2023. The decision reflects easing inflation pressures, with first-quarter headline inflation dropping to 2.4%, a four-year low and comfortably within the central bank’s 2%-3% target range.
Australia’s benchmark S&P/ASX 200 rose 0.58% to finish at 8,343.3, as markets welcomed the dovish turn. The Commonwealth Bank of Australia, which had predicted the cut, expects further easing if inflation continues to trend lower.
Japan and Korea See Modest Gains
Elsewhere in the region:
- Japan’s Nikkei 225 edged up 0.08% to 37,529.49, while the Topix added 0.02% to 2,738.83.
- South Korea’s Kospi closed flat at 2,601.8, while the Kosdaq, focused on small-cap tech, gained 0.25% to 715.55.
Investor Spotlight: CATL Soars in Hong Kong Debut
Investor interest was also high around Contemporary Amperex Technology Co. Limited (CATL), the world’s largest battery manufacturer, which made a strong Hong Kong trading debut, soaring over 11%. CATL’s performance underscores the growing appetite for green technology and EV-related investments in the region.
U.S. Futures Flat After Modest Gains Overnight
In the U.S., stock futures were little changed ahead of the market open:
- S&P 500 futures rose less than 0.1%.
- Nasdaq 100 futures dipped 0.1%.
- Dow futures gained 54 points or 0.14%.
On Monday, Wall Street posted minor gains despite concerns over Moody’s downgrade of the U.S. credit rating. The S&P 500 added 0.09% to close at 5,963.60, marking its sixth consecutive session of gains. The Nasdaq Composite inched up 0.02% to 19,215.46, while the Dow Jones Industrial Average rose 0.32% to 42,792.07, lifted by a rebound in key blue-chip stocks.
With global central banks navigating a complex economic landscape, investors will be watching closely for further rate moves, inflation data, and geopolitical developments. China and Australia’s rate cuts may set the tone for other central banks in Asia facing similar pressures. For now, markets appear cautiously optimistic that monetary easing will help cushion growth risks heading into the second half of 2025.
