South Korean stocks lead broad gains in Asia Reserve Bank

South Korean stocks lead broad gains in Asia; Reserve Bank of Australia hikes rates as expected

SINGAPORE — Stocks in Asia-Pacific were mostly higher on Tuesday as the Reserve Bank of Australia hiked interest rates in line with expectations.

South Korea’s Kospi was up 1.8% to close at 2,341.78 and the Kosdaq was up 3.9% to 750.95. SK Hynix rose 3.82% while Naver rose 3.4%.

Japan’s Nikkei 225 gained about 1% to close at 26,423.47, while the Topix index rose 0.5% to 1,879.12.

Hong Kong’s Hang Seng index pared earlier gains and rose 0.43% in its latest hour of trading.

In Australia, the S&P/ASX 200 was up 0.25% at 6,629.3 at the close.

The Reserve Bank of Australia hiked interest rates by 50 basis points to 1.35% today, as forecast. The Australian dollar fell on the announcement of the RBA decision and last traded at $0.6854.

MSCI’s broadest index of Asia Pacific stocks outside of Japan rose 0.58%.

Markets in mainland China bucked the trend. The Shanghai Composite ended slightly lower at 3,403.57 and the Shenzhen Component was down 0.408% at 12,973.11.

US Treasury Secretary Janet Yellen and China’s Vice Premier Liu He held a virtual phone call on Tuesday to discuss macroeconomic issues.

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Elsewhere in the region, South Korean data released on Tuesday showed the consumer price index rose 6% in June compared to the same period last year. That’s slightly more than the expected 5.9% increase and the fastest annual increase since November 1998, according to R.

‚ÄúPrice pressures and a hawkish Fed at a time when South Korea’s balance of payments is under pressure argue for a 50 basis point rate hike [Bank of Korea’s] Meeting on July 13,” ANZ economist Krystal Tan wrote in a note on Tuesday.

According to au Jibun Bank Japan’s final Services Purchasing Managers’ Index, Japan’s service activity expanded at the fastest rate since October 2013. Pressure rose to 54 from 52.6 in May.

The 50-point mark separates growth from contraction on a monthly basis.

China’s service sector activity also grew, according to the Caixin Services Purchasing Managers’ Index. The index rose to 54.5 in June, compared with 41.4 in May when Covid measures were eased.

In company news, a group of lawmakers in the UK are reportedly calling for a ban on Chinese CCTV makers Hikvision and Dahua over alleged links to human rights abuses.

US markets were closed overnight for a holiday.

Currencies and Oil

The US Dollar Index, which tracks the greenback against a basket of its peers, came in at 105.163.

The Japanese yen traded at 136.21 per dollar after briefly slipping above 137 against the greenback last week.

US crude futures were up 1.4% to $109.95 a barrel in Asian afternoon trade, while Brent crude futures were down 0.19% to $113.29 a barrel.