Asia-Pacific stock markets presented a varied landscape at Tuesday’s close, with investors continuing to navigate the evolving global trade climate, particularly after US President Donald Trump deferred a significant tariff hike on European Union imports.
While some regional bourses found positive momentum, others, including Indian benchmarks like the Sensex, experienced a more turbulent session.
The overarching theme for the day was a careful assessment of international trade dynamics.
Japan’s benchmark Nikkei 225 ended the day 0.51% higher at 37,724.11, and the broader Topix index rose 0.64% to 2,769.49, suggesting some optimism in Tokyo.
In contrast, South Korea’s Kospi index fell 0.27% to close at 2,637.22, reversing course after reaching a three-month high in Monday’s session.
However, the small-cap Kosdaq managed to eke out a gain of 0.25% to 727.11 amidst choppy trading conditions.
Mainland Chinese markets showed weakness, with the CSI 300 index retreating 0.54% to close at 3,839.40.
However, Hong Kong’s Hang Seng Index bucked this trend, gaining 0.43% to end the day at 23,381.99.
A bright spot from China was data indicating that industrial profits rose 1.4% in April, an acceleration from the 0.8% growth seen the month before.
Over in Australia, the S&P/ASX 200 advanced 0.56% to finish at 8,407.6, marking the benchmark’s third consecutive day in positive territory.
This positive sentiment was partly fueled by President Trump’s decision to postpone the implementation of 50% tariffs on EU imports, a move that was welcomed by investors globally and reflected in a jump in US futures.
Dow Jones Industrial Average futures added 407 points (1%), S&P 500 futures climbed 1.1%, and Nasdaq 100 futures popped 1.3%, even as US markets remained closed on Monday for the Memorial Day holiday.
Indian markets: a volatile session sees Sensex retreat
Indian equity benchmark indices experienced a day of significant volatility, ultimately extending losses as mixed global cues and apparent profit booking weighed on investor sentiment.
After briefly reclaiming the 82,000 level intraday, the BSE Sensex succumbed to selling pressure, at one point tanking around 1,000 points to hit 81,121.70 at approximately 2:30 pm.
By the close, the Sensex was trading 624.82 points, or 0.76%, lower at 81,551.63 as per 3:40 pm IST data, which often serves as a provisional close.
Similarly, the Nifty 50 depreciated by 174.95 points, or 0.70%, to 24,826.20.
Earlier in the session, at 1:46 pm Indian Standard Time, India’s benchmark Nifty 50 had declined 0.6%, while the BSE Sensex had dropped 0.79%.
The downturn was driven by weakness in FMCG and IT stocks, which fell over 1%.
Nearly an hour before the market close, only defence, realty, media, and PSU Bank indexes managed to trade with marginal gains, while all other sectoral indices were in negative territory.
Leading the gainers on the Nifty 50 were Jio Financial, IndusInd, Trent, BEL, and Asian Paints, while Ultratech, ITC, Axis Bank, JSW Steel, and Grasim were among the decliners. Midcap and smallcap indexes traded flat.
Bond market focus and currency movements
In fixed income, yields on super-long Japanese government bonds (JGBs) fell on Tuesday.
According to Reuters report, citing sources familiar with the matter, Japan’s finance ministry may consider reducing the issuance of these bonds.
The publication indicated that the ministry might tweak the composition of its bond program for the current fiscal year, potentially involving a trim in the issuance of super-long bonds.
As of 3:20 p.m. local time, the yield on 30-year JGBs fell 6 basis points to 2.859%, its lowest since May 14, while the 20-year JGB yield fell 7 basis points to 2.351%.
In contrast, the two-year JGB yield edged up by a basis point to 0.732%, and the five-year JGB yield was last seen up 1 basis point at 1.002%.
Asian currencies, meanwhile, continued their rally against a weakening US dollar.
The greenback extended its declines as concerns over President Trump’s tax bill, which threatens to significantly increase US debt, prompted a flight to safety.
The US dollar index had declined 0.23% to 98.882 as of 12:13 p.m. Singapore time.
The Japanese yen strengthened 0.31% against the dollar to 142.40, partly supported by Bank of Japan Governor Kazuo Ueda’s indication of a potential continuation of interest rate hikes if the economy improves.
The Taiwanese dollar also advanced for the sixth consecutive day, last seen 0.12% stronger against the greenback at 29.879.
The South Korean won was flat against the dollar at 1,368.12.
In Southeast Asia, the Malaysian ringgit appreciated by 0.17% against the dollar to 4.2080, after hitting its highest level in nearly three weeks earlier in the session.
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