Most Asian stocks rose on Tuesday, tracking gains on Wall Street amid growing expectations of an interest rate cut in September, while Chinese markets lagged on concerns about a slowing economy and headwinds from U.S. politics.
Regional markets took positive cues from a strong close on Wall Street, after dovish comments from Federal Reserve Chairman Jerome Powell showed the central bank has greater confidence in easing inflation.
Growing speculation about a Donald Trump presidency also supported stock markets, with hopes that such a scenario would lead to a more relaxed regulatory environment.
U.S. stock index futures rose in Asian trading.
Chinese stocks fall on Trump concerns, weak GDP
Chinese stock indices moved in a flat-to-low range, while Hong Kong’s index fell 1.5%.
Speculation about a second Trump term has weighed on Chinese stocks, as the former president maintained a strong anti-China rhetoric. Trump imposed steep tariffs on China during his term, sparking a protracted trade war between Washington and Beijing in the late 2000s.
Trump is expected to gain an advantage over President Joe Biden in the 2024 presidential race, especially after a failed assassination attempt on Trump that appears to have boosted the former president’s popularity.
Trump was formally nominated Monday as the Republican presidential nominee, choosing Ohio Sen. J.D. Vance as his running mate.
Chinese stocks were already suffering from fears of a renewed trade war with the West, after the European Union joined the United States in imposing heavy tariffs on key industries.
Disappointing second-quarter data released on Monday also contributed to weak sentiment toward China.
Attention is now focused on the third session of the Chinese Communist Party, amid growing pressure on Beijing to unleash more stimulus.
Broader Asian markets were mostly higher on Tuesday, with South Korea adding 0.1%.
Japanese and U.S. stocks were the best performers of the day, rising 0.5% and 0.8% respectively, as they caught up with their peers after Monday’s holiday.
India’s index futures pointed to a positive open, after the index continued to hit record highs amid optimism about the Indian economy.
Australian shares fall below record highs on Rio Tinto
The Australian share index fell 0.2% from its all-time high, mainly affected by losses at mining giant Rio Tinto (ASX:).
Rio Tinto shares fell 2.3% after second-quarter iron ore shipments missed expectations due to disruptions caused by a train derailment.
Although shipments continued to rise despite slowing demand in China, the company’s outlook was somewhat clouded by growing uncertainty about the Chinese economy.
Weakness in China also bodes well for other Australian commodity stocks, given that China is the country’s largest export destination.
Rio’s peer BHP Group Ltd (ASX:) fell 1.7%. BHP is also due to report quarterly production figures this week.