Asian stock markets extended gains on Tuesday, lifted by the latest U.S.-China trade truce and signs of cooling geopolitical tensions between India and Pakistan. However, Chinese shares underperformed as investors booked profits and remained cautious over potential delays in stimulus measures.
🟢 Asian Markets React to Tariff De-escalation
The upbeat mood came after the U.S. and China agreed to slash reciprocal tariffs. The U.S. announced it would reduce tariffs on Chinese imports from 145% to 30%, while China will cut tariffs on U.S. goods from 125% to 10%. This marked a significant de-escalation in the prolonged trade war between the world’s largest economies.
- Japan’s Nikkei 225 jumped 1.7%
- TOPIX index added 1.2%
- Singapore’s Straits Times gained 0.7%
- Australia’s ASX 200 rose 0.7%, reaching a two-month high
- South Korea’s KOSPI edged up 0.4%
Investors cheered the tariff rollback, anticipating further trade agreements from Washington with other major economies.
⚠️ China Markets Lag Despite Trade Optimism
In contrast, Chinese stocks lagged the regional rally:
- Shanghai Composite rose just 0.2%
- CSI 300 index added 0.2%
- Hong Kong’s Hang Seng dropped 1.3%
The muted performance came after a week of strong gains, prompting profit-taking. Analysts also pointed to doubts over new stimulus measures from Beijing. As trade tensions ease, policymakers may hold off on fiscal support despite weak April inflation and PMI data, which suggest a slowing domestic recovery.
🇮🇳 India Stocks to Cool After Ceasefire Boost
Indian equities, which surged nearly 4% on Monday, were expected to open lower Tuesday as profit-taking kicks in. Optimism followed a U.S.-brokered ceasefire between India and Pakistan, calming some of the worst cross-border violence in decades.
Markets now await India’s consumer inflation data, expected later today, which may show further cooling and influence the Reserve Bank of India’s policy direction.
✅ Key Takeaways for Investors
- U.S.-China tariff cuts signal reduced trade friction and improve market sentiment globally.
- Asian equities rallied, but Chinese stocks lagged due to stimulus concerns.
- Geopolitical relief from the India-Pakistan ceasefire supported regional risk appetite.
- Focus shifts to upcoming U.S. inflation data and Indian CPI figures for further market direction.
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