Asia: Chinese stocks remain high after rate cut, Australia jumps on positive house data

Most Asian stocks were higher on Tuesday following China’s central bank decision to cut its benchmark lending and deposit rates by 0.25 percentage points.

The People’s Bank of China on Sunday lowered interest rates to 5.1% and the deposit rate to 2.25%. It marked the third time in six months the bank has reduced interest rates amid a slowdown in the world’s second largest economy.

The Shanghai composite index closed 1.56% higher, but Hong Kong's Hang Seng fell 1.12%.

Analysts forecast further support from China’s central bank, but Commerzbank said the overtures would prove difficult to impress the base metals market, which has to an extent, already priced in stimulus measures.

On other news, Capital Economics noted on Tuesday that China's current account surplus was half as large as last year's, due to a surge in spending by Chinese tourists overseas.

According to the economists, Chinese tourists made 117m trios abroad last year, spending $165bn, more than those from any other country over the past three years.

"Tourist spending is recorded as a service import and its growth has contributed to a ballooning of China’s services trade deficit," they noted.

Australia's ASX rose 0.88% driven by strong data. Home loans increased to 1.6% in March against expectations of 1% and the previous month's 1.1% growth. Investment lending for homes also rose to 6.4% from a decline of 3.4% in April.

TradeNext's Petra Kuraliova warned, however: "Gains though seem to be limited and today’s high is possibly all where it gets for now."

Elsewhere in Japan, the Nikkei 225 was slightly up by 0.02% thanks to a weaker yen at ¥120.08 against the dollar.

Bank of Japan's Haruhiko Kuroda said on Monday he is not planning on lowering or cancelling the interest rate on excess reserves as it helps BOJ with monetary base expansion.

Japanese coincident index fell slighty to 109.5 in March from 110.7 points, but the leading economic index rose to 105.5 from 104.7.

In company news, Suzuki Motor Corporation gained 7.8% despite reporting a fall in profits for the first time in six years. The automaker expects total sales to grow 3.9% to 2.98m cars and a 5.9% rise in operating profits for the full-year, helped by strong sales in Europe and India.

Still among Japanese companies, Toshiba fell on news of an investigation into its accounting.

On the bright side, Australian airline Qantas jumped 7.23% after its chief executive said low fuel prices and cuts in costs will help the company's dividends.