Traders work on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City.
Timothy A. Clary | Afp | Getty Images
Asia-Pacific markets traded mixed Tuesday, following Wall Street’s massive rally on the back of a trade deal between the U.S. and China, which includes a 90-day pause on tariffs and a drop in reciprocal tariffs by 115 percentage points.
Analysts at Japanese investment bank Nomura have now upgraded Chinese equities to a “tactical overweight.”
The agreement to temporarily reduce tariffs “came as a significant surprise for markets, and will likely support risk positivity in the near term,” Chetan Seth, Asia-Pacific equity strategist at the bank wrote in a Tuesday note.
“While markets have been expecting some reduction in tariffs over the past few days, we think this reduction is much larger than expected and will bring a major relief for global (including Asian) stocks,” they added.
Nomura trimmed its overweight stance on India as it rotated into the China stocks, upgrading them to ‘tactical Overweight.’
Hong Kong stocks fell sharply, with the Hang Seng Index declining 1.68% — sharpest drop in nearly a month — and the Hang Seng Tech Index plunging 3.06%. This was a reversal from the strong gains both indexes logged in the previous session. Meanwhile, mainland China’s CSI 300 index rose 0.16%.
Indian markets fell at the open with the benchmark Nifty 50 down 0.85% while the BSE Sensex lost 0.86%. This is a reversal from the significant gains in the previous session, when Indian markets posted their best one-day gain since February 2021, following optimism over the India—Pakistan ceasefire.
Over in Japan, the Nikkei 225 pared gains to 1.43% to end the day at 38,183.26. This marks the benchmark’s fourth consecutive positive session. Meanwhile, the broader Topix index advanced 1.10% to 2,772.14, making this its 13th straight day of gains.
South Korea’s Kospi closed flat at 2,608.42 while the small-cap Kosdaq added 0.89% to 731.88.
In Australia, the benchmark S&P/ASX 200 rose 0.43% to end the day at 8,269.
U.S. stock futures fell after all three key benchmarks hit their best day since April 9, as investors awaited the release of an inflation report.
Overnight stateside, stocks soared as investors’ fears of a recession in the U.S., sparked by a trade war with China, were abated after the two superpowers arrived at a deal.
The Dow Jones Industrial Average surged 1,160.72 points, or 2.81%, and closed at 42,410.10. The 30-stock index ended the session near its highs of the day, with buying enthusiasm remaining strong.
Meanwhile, the broad-based S&P 500 popped 3.26% to end at 5,844.19, giving it gains of over 20% since its April intraday low at the height of tariff pessimism. The benchmark’s year-to-date losses have now narrowed to just 0.6%.
The Nasdaq Composite added 4.35% and settled at 18,708.34, as the details of the trade deal sent technology stocks with exposure to China — like Tesla and Apple — higher.
— CNBC’s Brian Evans, Yun Li and Fred Imbert contributed to this report.
