Asia report: Markets rise, RBA snips interest rates further

Markets in Asia put in a decent performance on Tuesday, ahead of the US presidential election, as the Reserve Bank of Australia took the secateurs to interest rates.

In Japan, markets were closed for the Culture Day holiday, as the yen strengthened 0.03% against the dollar to last trade at JPY 104.69.

On the mainland, the Shanghai Composite was up 1.42% at 3,271.07, and the smaller, technology-centric Shenzhen Composite added 1.43% to 2,255.08.

South Korea’s Kospi jumped 1.88% to 2,343.31, while the Hang Seng Index in Hong Kong advanced 1.96% to 24,939.73.

Life insurance giant AIA rocketed 6.27% by the close in the special administrative region.

The blue-chip technology stocks were both higher in Seoul, with Samsung Electronics up 3.44% and SK Hynix adding 2.26%.

“It’s a firm risk-on mood for investors as equities rise across Europe and Asia,” said Russ Mould, investment director at AJ Bell.

“Investors seem to be pricing in a victory by Joe Biden in the US presidential election, and anticipation is high that he will have a more favourable trade policy with China and the EU.

“This factor, together with a weaker dollar, favour the commodities space.”

Oil prices were higher as the region went to bed, with Brent crude last up 2.62% at $39.99 per barrel, and West Texas Intermediate rising 2.8% to $37.84.

In Australia, the S&P/ASX 200 was ahead 1.93% at 6,066.40, as the country’s central bank lowered its cash rate to 0.1%, from a previous 0.25%.

The new rate was the lowest ever set by the Reserve Bank of Australia, and took it to a level that many commentators saw as being as close to zero as policymakers could get.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.49% to 12,130.31, as construction conglomerate Fletcher Building added 3.33% in Wellington.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.8% at AUD 1.4057, and the Kiwi advancing 0.44% to NZD 1.5005.