Asia-Pacific markets traded modestly higher on Tuesday, buoyed by overnight gains on Wall Street, despite intensifying trade frictions between major economic powers.
By 11:15 am AEST (1:15 am GMT), Australia’s S&P/ASX 200 rose 0.7%, while Japan’s Nikkei 225 advanced 0.5%. South Korea’s Kospi 200 remained closed in observance of Election Day.
Traders are monitoring rising trade tensions between the United States and China as Beijing pushed back against accusations from U.S. President Donald Trump that it had breached a temporary trade deal, instead shifting blame to Washington.
Meanwhile, the European Union criticised Trump’s decision to double U.S. steel tariffs to 50%, warning the move “undermines” transatlantic talks.
Local data showed that Australia’s current account balance rose by A$1.7 billion during the March quarter 2025 to a deficit of $14.7 billion, according to figures released today by the Australian Bureau of Statistics (ABS).
Tom Lay, ABS head of international statistics noted: “The rise in the current account balance was led by a $1.9 billion reduction in the net income deficit, which was partly offset by a $0.2 billion fall in the goods and services surplus.”
Meanwhile, China’s Caixin manufacturing purchasing managers' index (PMI) dropped to 48.3 in May from 50.4 in April, coming in well below expectations for a reading of 50.6.
This marked the first contraction in factory activity in eight months and the weakest result since September 2022. A reading below 50 indicates a contraction in the sector.
On Wall Street, U.S. markets closed higher on Monday. The Dow Jones Industrial Average edged up 0.1%, the S&P 500 gained 0.4%, and the Nasdaq Composite climbed 0.7%.
In commodities, Brent crude rallied 3% to US$64.63 per barrel amid supply concerns, while spot gold surged 2.8% to a three-week high of US$3,381.87 per ounce as investors sought safety.
Chinese equity markets were closed for a public holiday. In Hong Kong, the Hang Seng Index declined 0.6% to 23,158.1, while India’s BSE Sensex slipped 0.1% to 81,373.8.
In Europe, early trading was largely negative. The UK’s FTSE 100 was flat at 8,774.3, Germany’s DAX fell 0.3% to 23,930.7, and France’s CAC 40 dropped 0.2% to 7,737.2.
