Asian equities ended mixed on Tuesday, as the initial optimism surrounding the weekend’s US-China trade agreement gave way to caution.
Investors scaled back expectations of aggressive interest rate cuts by the Federal Reserve and questioned the durability of the 90-day tariff truce.
Ratings agency Fitch noted that the US effective tariff rate has now eased to 13.1% from 22.8% after the deal, but remains far above the 2.3% level seen at the end of 2024 and still at levels last witnessed during World War II.
China, Hong Kong stocks on Tuesday
China’s Shanghai Composite Index managed to eke out a modest gain, ending 0.17% higher at 3,374.87.
The move came despite a sharp drop in defense-related stocks after a ceasefire was announced between India and Pakistan.
Meanwhile, Chinese President Xi Jinping warned against “bullying or hegemonism” in remarks made to Latin American and Caribbean leaders, seen by analysts as a veiled rebuke of US policy.
In Hong Kong, markets gave back a large chunk of Monday’s rally.
The Hang Seng Index dropped 1.9% to 23,108.27, while the Hang Seng Tech Index slumped 3.3%.
Traders took profits after Monday’s 3% surge, as caution returned over the longer-term outlook for global trade.
Export-driven stocks led the decline. Sunny Optical plunged 7.6%, BYD Electronic slid 7.1%, and JD.com dropped 2.1% ahead of its earnings release.
Japanese stocks continue to rally
Japanese stocks outperformed, with the Nikkei rallying 1.43% to 38,183.26, marking a three-month high.
A weaker yen boosted sentiment for exporters.
The broader Topix climbed 1.10% to 2,772.14, extending its winning streak to 13 sessions—its longest run since 2008.
Tokyo Electron surged nearly 5%, while Sony and Nissan gained 1.7% and 3%, respectively.
Other regional markets
South Korea’s Kospi ended flat at 2,608.42 after a volatile session.
Gains in battery majors like Samsung SDI and LG Energy Solution helped offset broader weakness.
Australia’s S&P/ASX 200 rose 0.43% to 8,269, hitting an 11-week high as investors priced in the possibility of a rate cut by the Reserve Bank of Australia. Tech and energy stocks led the gains.
Indian benchmark indices closed lower on May 13, with the Nifty slipping below the 24,600 mark amid broad-based selling pressure in heavyweight sectors.
The Sensex declined 1,281.68 points, or 1.55 percent, to end at 81,148.22, while the Nifty shed 346.35 points, or 1.39 percent, to settle at 24,578.35.
Among Nifty constituents, top losers included Power Grid Corporation, Infosys, Eternal, TCS, and HCL Technologies.
Wall Street on Monday
US stocks soared on Monday, erasing last week’s modest losses and registering their strongest gains in over two months.
The Nasdaq jumped 4.4% to 18,708.34, the S&P 500 rallied 3.3% to 5,844.19, and the Dow climbed 2.8% to 42,420.10.
The sharp rally followed news that Washington and Beijing had agreed to drastically cut tariffs on each other’s goods.
Investors welcomed the breakthrough, though some analysts cautioned that structural issues remain unresolved and further volatility is likely.
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