Asian Stocks Mixed as Investors Eye U.S. Rates and Tariff Risks
Asian stock markets traded mixed on Tuesday as uncertainty over U.S. trade tariffs and interest rate cuts kept investors cautious. Chinese markets, meanwhile, retreated from recent highs after mixed economic data for August.
Trading volume was limited due to the U.S. market holiday on Monday. Still, S&P 500 futures slipped 0.1% in Asian trade. Investors remained risk-averse amid a legal challenge to President Donald Trump’s tariffs and uncertainty ahead of the Federal Reserve’s September meeting.
Markets are closely watching upcoming U.S. nonfarm payrolls data. The jobs report is expected to influence whether the Fed delivers a September rate cut, despite sticky inflation readings last week.
Regional Performance Across Asia
Japan’s Nikkei 225 gained 0.5%, while the TOPIX index advanced 0.7%. South Korea’s KOSPI outperformed, rising 0.9% after August CPI inflation came in softer than expected. The weaker data raised hopes of more Bank of Korea rate cuts.
Singapore’s Straits Times index added 0.4%, while Australian shares edged lower on weaker export data.
China Stocks Retreat After PMI Data
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes dropped 0.9% and 0.8%, respectively, pulling back from last week’s multi-year highs. Hong Kong’s Hang Seng index also lost 0.7%.
Recent PMI data highlighted weakness in China’s economy. Government figures showed a larger-than-expected drop in manufacturing, while private data pointed to slight but sluggish growth. The slowdown raised concerns over fading business activity, though analysts expect more stimulus from Beijing to follow.
Chinese and Hong Kong chipmaking stocks were among the worst performers. Cambricon Technologies swung sharply, while Semiconductor Manufacturing International Corp and Hua Hong Semiconductor both fell nearly 6%.
Australia and India Struggle With Growth and Tariffs
Australia’s ASX 200 slipped 0.3% after net exports contributed less than expected to Q2 GDP. The report raised the risk that GDP growth, due Wednesday, may fall short of the 0.5% forecast. However, the current account deficit came in smaller than expected.
India’s Nifty 50 opened 0.2% higher but remained under pressure from Trump’s newly imposed 50% tariffs. The tariffs, aimed at reducing India’s purchases of Russian oil, weighed heavily on investor sentiment.
While India reported strong local economic data, the rupee only stabilized after hitting a record low on Monday. Talks between Washington and New Delhi showed little progress, as India continues to depend heavily on Russian oil imports despite U.S. pressure.
