Asian stocks fall, RBA rates cuts buoy ASX

Chinese stocks slipped on Tuesday afternoon trades as other Asian markets remained weak amid the ongoing trade war anxiety.

In Japan, the benchmark Nikkei 225 dropped 0.16% or 25.39 points at 20385 as the index heavyweight Softbank Group’s shares declined more than 3% on the day. The Topix index was also lower, dropping 0.17%.

South Korea’s Kospi index also turned red in the afternoon, having been largely flat over the day. It dropped 0.06% or 1.34 points at 2066.56

In China, mainland Chinese shares also declined in the afternoon. The Shanghai Composite fell 0.85% or 22.56 points at 2867.39, while the Shenzhen component dropped 0.86%. The Shenzhen composite declined 1.014%.

Hong Kong’s Hang Seng index dropped 0.32%, with shares tech giant Tencent shedding 1.64%.

In Australia, the ASX 200 was up 0.23% following the Reserve Bank of Australia’s (RBA) announcement of a 1.25% or 25 basis points cut to its cash rate.

RBA Governor Philip Lowe explained on Tuesday that the decision to cut the rates would help the economy. Analysts have also predicted that the cash rate will fall to 0.5% by June next year.

Meanwhile, investors are keenly watching out for the direction that the U.S.-China trade war takes. Already, the tariffs that both countries imposed on goods from either country have impacted the market, with uncertainty looming over a lack of a deal.

The U.S. is also threatening to impose tariffs on Mexican goods, with U.S. president Donald Trump announcing last week that the first 5% tariff hike will take effect on June 10.

In currencies, the U.S. dollar index was at 97.171 after slipping from higher levels at 97.6 on Monday afternoon. The safe-haven Japanese yen changed at 107.97 to the dollar, while the Australian dollar moved higher from a low of $0.6958 to trade at $0.6975.

Oil prices have also dropped, with the international benchmark Brent crude futures down 0.47% to hit $60.99 per barrel. The U.S. crude futures contract declined 0.32% to $53.08 pb.