Asian stocks traded within a narrow range on Tuesday as markets awaited the Reserve Bank of Australia’s (RBA) policy decision, while equities in Hong Kong continued to rise, fueled by a tech-driven rally. Regional stock benchmarks fluctuated between gains and losses, and Australian stocks edged lower ahead of the central bank’s meeting. The U.S. dollar strengthened against most major currencies.
China’s market sentiment was bolstered after a meeting between President Xi Jinping and key business figures, including Alibaba co-founder Jack Ma, which sparked optimism that the government’s crackdown on the private sector could be winding down. The rally in Chinese shares, driven by DeepSeek’s AI breakthrough, has now exceeded $1 trillion in value.
“It’s a good rebound, but before it turns into a multiyear upward trend, much needs to be done,” said Hao Hong, partner and economist at Grow Investment Group, in an interview with Bloomberg TV. “A sustainable bull market requires a solid growth model for the future.”
The meeting, which included top names from sectors such as chipmaking, electric vehicles, and AI, highlighted Beijing’s shift toward a more supportive stance toward the companies that are central to China’s economy, especially as the U.S. increases tariffs globally. A Hong Kong technology stock index, driven by the DeepSeek rally, remained near a three-year high, although it saw a slight pullback on Monday.
The Australian dollar held steady near a two-month high ahead of the RBA’s expected first rate cut in four years. However, Bloomberg Economics analyst James McIntyre noted that a strong labor market, resilient consumer spending, solid credit growth, and a weaker currency could justify the central bank maintaining its current rates.
In corporate news, BHP Group Ltd. reported a 23% drop in first-half profits, citing reduced Chinese demand for key commodities like iron ore and copper.
Meanwhile, Federal Reserve Governor Christopher Waller indicated that recent economic data supports holding U.S. interest rates steady, but if inflation trends as it did in 2024, rate cuts could be back on the table later this year.
In commodities, oil prices continued to rise after OPEC+ delegates suggested a delay in restoring output, while a Ukrainian drone strike targeted a Russian oil-pumping station. Gold prices also held onto their recent gains, rising 0.5% on Monday.
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