Asia report: Markets finish mixed as RBA slashes rates to record low

Markets in Asia finished in a mixed state on Tuesday, after Australia’s central bank cut interest rates to a fresh all-time low for the country.

In Japan, the Nikkei 225 was up 0.11% at 21,754.27, as the yen strengthened 0.16% against the dollar to last trade at JPY 108.28.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.68% and fashion firm Fast Retailing lost 0.99%, while technology conglomerate SoftBank Group rose 0.29%.

The broader Topix index was up 0.31% to close out the trading day at 1,589.84.

On the mainland, the Shanghai Composite slipped 0.03% to 3,043.94, and the smaller, technology-heavy Shenzhen Composite rose 0.16% to 1,619.12.

South Korea’s Kospi was 0.36% lower at 2,122.02, while the Hang Seng Index in Hong Kong rose 1.17% to 28,875.56, after being closed for a holiday marred by political protest on Monday.

The blue-chip technology stocks were a mixed bag in Seoul, with Samsung Electronics down 0.75%, while chipmaker SK Hynix rose 2%.

Sentiment began positive at the start of the Asian day, as investors continued to cheer the recent developments on the US-China trade front.

Donald Trump and Xi Jinping agreed to a ceasefire at the G20 summit in Japan over the weekend, with both pledging not to implement any fresh tariffs on either country’s goods.

The US president had said overnight that trade discussions between Washington and Beijing had “already begun” following the meeting.

Investors were given little respite by the trade truce, according to London Capital Group senior market analyst Ipek Ozkardeskaya, who noted that US officials turned their attention to Europe rather rapidly.

“The US Trade Representative’s office added $4bn worth of EU goods to the list of products that could be hit by the US tariffs on the back of a long-lasting subsidy quarrel between Boeing and Airbus.

“A list of $21bn worth of goods was already announced in April.

“Hence, the risk appetite remained limited during the rest of the US trading session.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.11% at $64.99 per barrel, and West Texas Intermediate off 0.36% at $58.88.

In Australia, the S&P/ASX 200 managed gains of 0.08% to settle at 6,653.20.

The Reserve Bank of Australia announced early in the session that it was slashing its official cash rate by 25 basis points to a new record low of 1%.

That came after it also cut rates in June, making for the second straight month of easing in the sunburnt country.

The central bank’s governor, Philip Lowe, said the decision to further lower the cash rate would help to “make inroads” into the Australian economy’s spare capacity.

“It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target,” Lowe explained.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.6% at 10,531.94, led higher by construction conglomerate Fletcher Building, which was ahead 2.9%.

Fletcher - which owns and operates a number of large construction firms, as well as construction materials manufacturers, wholesalers and retailers - was boosted by the news that new house building permits across the country reached a 45-year high in May.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.37% stronger at AUD 1.4303, while the Kiwi weakened 0.23% to NZD 1.5015.