Asian Stocks Gain on U.S.-China Tariff Relief, But China Lags on Stimulus Uncertainty

Asian markets mostly rose on Tuesday as investors welcomed a significant cooling in the U.S.-China trade war. The U.S. and China announced mutual tariff cuts—Washington reducing its levies from 145% to 30%, and Beijing from 125% to 10%—sparking optimism for broader trade resolutions and lifting regional sentiment.

Japan led the rally, with the Nikkei 225 and TOPIX gaining 1.7% and 1.2% respectively. Singapore’s Straits Times and Australia’s ASX 200 each advanced 0.7%, with the latter hitting a two-month high on improved consumer sentiment. South Korea’s KOSPI rose 0.4%, and other Southeast Asian markets followed suit.

However, Chinese stocks underperformed despite the positive trade development. The Shanghai Composite and CSI 300 inched up just 0.2%, while Hong Kong’s Hang Seng dropped 1.3%, weighed down by profit-taking and skepticism over further local stimulus. Analysts from Citi suggested easing trade tensions may reduce Beijing’s urgency for additional fiscal measures. Recent weak inflation and PMI data also dampened investor enthusiasm in China.

Meanwhile, Indian stocks are expected to see a mild pullback after surging nearly 4% on news of a U.S.-brokered ceasefire with Pakistan, easing the region’s most intense conflict in decades. Gift Nifty 50 Futures hinted at a softer open ahead of India’s consumer inflation report, which is anticipated to show further easing for April.

Market focus now shifts to U.S. inflation data due later in the day, which could influence the global risk outlook and further shape expectations on monetary policy and trade negotiations. The S&P 500 Futures edged down 0.3% in Asian trade after a strong 3.3% rally on Monday.