Asia-Pacific equity markets traded higher on Tuesday, buoyed by upbeat economic data and regional defence developments, even as trade tensions flared after United States President Donald Trump pledged to impose significantly higher tariffs on Indian exports.
At 11:40 am AEST (1:40 am GMT), Australia’s S&P/ASX 200 was up 1.1%, Japan’s Nikkei 225 added 0.5%, and South Korea’s Kospi 200 advanced 1.5%.
The gains followed comments from Trump on Truth Social, where he criticised India’s continued oil trade with Russia:
“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits.”
The tariff announcement was made without details on implementation or scope, but raised concerns of renewed economic friction between the world’s largest democracies.
Meanwhile, Mitsubishi Heavy Industries jumped 4% after it secured an A$10 billion contract to construct 11 new frigates for the Australian Navy.
The company’s Mogami-class frigate was selected over Germany’s ThyssenKrupp Marine System’s MEKO A-200 design.
The first three warships will be built in Japan and delivered by 2029, with the remaining vessels to be constructed in Western Australia.
“The upgraded Mogami-class frigate will help secure our maritime trade routes and our northern approaches as part of a larger and more lethal naval surface combatant fleet,” said Australian Deputy Prime Minister Richard Marles.
Among economic data releases, South Korea’s July consumer inflation rose 2.1% year-on-year, marginally slower than the 2.2% seen in June, while Australian household spending lifted 0.5% in June, following a 1.0% rise in May.
Services PMI data beat forecasts across multiple regions:
- Australia’s services PMI came in at 54.1, exceeding expectations of 53.8 and marking the strongest pace since March 2024.
- Japan’s services PMI rose to 53.6 from 51.7 in June, pointing to accelerating growth.
- China’s Caixin services PMI climbed to 52.6, well above expectations of 50.4 and the previous month’s 50.6 reading, the fastest expansion since May 2024.
In a separate release, minutes from the Bank of Japan’s June policy meeting revealed some board members are prepared to resume interest rate hikes if geopolitical tensions ease:
"A few members expressed the view that, taking into account the fact that wages had been solid and prices had been slightly higher than expected, the Bank would likely move on from its current wait-and-see approach and consider resuming the process of policy interest rate hikes, if trade friction was expected to progress without escalation."
Wall Street rebounded overnight, with the Dow Jones Industrial Average rising 1.3%, the S&P 500 up 1.5%, and the Nasdaq Composite gaining 2%.
In commodities, Brent crude slipped 1.3% to a one-week low of US$68.76 per barrel, while spot gold rose 0.3% to a one-week high of US$3,373.64 per ounce.
Chinese equities finished stronger, with the Shanghai Composite up 0.7% to 3,583.3, and the CSI 300 climbing 0.4% to 4,070.7.
Hong Kong’s Hang Seng Index advanced 0.9% to 24,733.5, and India’s BSE Sensex edged up 0.5% to 81,018.7.
European markets also closed higher, with the FTSE 100 gaining 0.7% to 9,128.3, the DAX rising 1.4% to 23,757.7, and France’s CAC 40 increasing 1.1% to 7,632.0.
