Investing.com – Most Asian stocks rose on Tuesday, following an overnight rally on Wall Street, as markets welcomed the prospect of lower U.S. interest rates ahead of a key address by Federal Reserve Chairman Jerome Powell later this week.
However, Chinese markets lagged behind those in the region after the Chinese central bank left its benchmark interest rate unchanged as expected, disappointing some traders who had expected further surprise rate cuts from the central bank.
Other Asian markets benefited from positive signals from Wall Street, where growing optimism about a rate cut in September prompted investors to return to equities, particularly heavyweight technology stocks.
U.S. stock index futures rose slightly in Asian trading. All focus this week is on Powell’s speech at the Jackson Hole Symposium on Friday, where he is expected to provide further guidance on the bank’s plans to cut interest rates.
Japan’s Nikkei near 3-week high, Seven & i slips
In Asia, Japanese stocks were the best performers. The index rose 1.8 percent, approaching a three-week high. The index gained 1.2 percent.
The Nikkei benefited primarily from the strength of technology stocks, whose rise was analogous to the strength of their US counterparts.
Operator of a convenience store Seven & i Holdings Co., Ltd. (TYO:) was an exception among Japanese stocks, falling over 6% as traders took profits from Monday’s rally. The stock rose over 20% on Monday after reports that Canada’s Food Couche Tard Inc (TSX:) had contacted Seven & i regarding an acquisition.
Broader Asian markets were mostly positive, with South Korean shares up 0.9 percent on strong technology stocks, while Australian shares rose 0.2 percent.
Gains in Australian markets were limited as the outcome of the Reserve Bank of Australia’s August meeting showed the bank was considering raising interest rates amid concerns about persistent inflation.
The RBA also signalled that it would keep interest rates high for longer – a trend that does not bode well for Australian markets. The prospect of weak economic growth in China also weighed on Australian equities, as they are heavily linked to China.
Chinese stocks fall as PBoC leaves interest rates unchanged
Chinese markets lagged behind other markets, halting their recovery from six-month lows after the People’s Bank of China left its benchmark interest rate unchanged.
The indices and lost 0.6% and 0.8% respectively, while the Hong Kong index lost 0.3%.
The PBoC left the benchmark interest rate unchanged, as widely expected. However, the move disappointed some traders who were expecting further rate cuts in the country, especially after the central bank unexpectedly cut the benchmark interest rate in July.
While recent economic data showed some improvement in Chinese consumer spending and inflation in July, overall sentiment toward the country was weighed down by persistent concerns about a slowdown in growth.
