Advertisement

Shanghai, Sydney lead gains in Asia on oil rebound, RBA action

CNBC
Peter Parks I AFP I Getty Images)

Asian stock markets traded mixed on Tuesday, as a rebound in crude oil prices brought mixed blessings, while a largely anticipated rate cut from the Reserve Bank of Australia (RBA) lifted Australian equities to near seven-year highs. The RBA unveiled a 25 basis-point interest rate cut at its policy meeting, bringing rates to a fresh record low after holding them at 2.5 percent since August 2013, to prop up an economy hit by falling commodity prices.

"With growth continuing at a below-trend pace, domestic demand growth quite weak and unemployment moving higher, the RBA felt it necessary to cut rates. However, the statement didn't sound as dovish as many would have wanted to reinforce the idea of another rate cut," wrote Stan Shamu, IG market strategist, in a note. "But given the pressure from other global central banks acting, [another rate cut] wouldn't be completely out of reach," he added.

Read More QE spawns new acronym - meet ZYNY Meanwhile, the Reserve Bank of India (RBI) kept its key repo rate at 7.75 percent at its monthly meeting on Tuesday, after lowering rates by a quarter-point three weeks ago. Gains in oil markets in early Asian trading, after clocking up gains of 11 percent in the prior two sessions, also lifted market sentiment. Brent crude traded at $54.97 a barrel, while U.S. WTI futures were at $49.94 a barrel. Overnight, U.S. equities closed sharply higher following encouraging news from the euro zone. As a result, the Dow Jones Industrial Average closed up 1.1 percent, while the S&P 500 ended 1.3 percent higher. The Nasdaq Composite added 0.9 percent.

ASX rises 1.5% Australia's key S&P ASX 200 index zoomed up to its highest level since June 2008, chalking up a nine-session winning streak, while the Australian dollar (Exchange:USDAUD=) sank to a six-year low of $0.7648 against the greenback. The resources sector advanced, with oil-related shares like Oil Search (ASX:OSH-AU) and Santos (ASX:STO-AU) closing up 4.4 and 2.6 percent, while big miners like BHP Billiton (London Stock Exchange: BLT-GB) and Rio Tinto (ASX:RIO-AU) gained 3.6 and 2 percent, respectively. Gold producers reversed losses, with Newcrest Mining (ASX:NCM-AU) rebounding 0.7 percent, after spot gold hovered above $1,270 an ounce on Tuesday. The banking sector turned positive following the interest rate cut; ANZ led gains with a 2.2 percent rise, while National Australia Bank widened gains to 1.6 percent. Westpac (ASX:WBC-AU) and Commonwealth Bank of Australia (ASX:CBA-AU) recouped losses to trade 1.2 and 0.8 percent higher. On the domestic data front, Australian approvals to build new homes in December fell 3.3 percent, after surging to a record high last month, figures from the Australian Bureau of Statistics showed. Meanwhile, the country's trade deficit stood at A$0.44 billion in December, compared with a shortfall of A$1.02 billion in November, the Australian Bureau of Statistics said Tuesday. The deficit was the smallest since the trade balance turned negative in April 2014.

Indian markets mixed India's benchmark Sensex (Hong Kong Stock Exchange: 2836-HK) and the Nifty index traded near one-and-a-half-week lows amid choppy trade following the central bank's decision. The Indian rupee (Exchange:INR=) was at 61.74 per dollar.

Mainland indices up China's benchmark Shanghai Composite index bolstered 2.5 percent to close at a two-week high, breaking a five-session losing streak, on the back of sharp gains in the energy and financial sectors. After being sold-off in the previous session, China Life Insurance and China Pacific Insurance rallied 9 and 6.5 percent each. Haitong Securities (Shanghai Stock Exchange: 837-SZ) and Citic Securities (Shanghai Stock Exchange: 30-SZ) leaped 6.2 and 5.5 percent, respectively, while Founder Securities closed up 2.7 percent. China Minsheng Banking (Shanghai Stock Exchange: 16-SZ) was up 2 percent in Shanghai and 0.6 percent in Hong Kong, after suffering steep losses on Monday following the resignation of its president over the weekend. Energy plays like PetroChina (Shanghai Stock Exchange: 1857-SZ) also gained 4.2 percent, while Sinopec (Shanghai Stock Exchange: 688-SZ) and China Oilfield Services (Shanghai Stock Exchange: 1808-SZ) advanced more than 2 percent each. Read More Are the odds stacking up against the yuan? In Hong Kong, the Hang Seng index inched up 0.2 percent. Chinese PC giant Lenovo (Hong Kong Stock Exchange: 992-HK) jumped 7 percent after its third-quarter revenue rose 31 percent to $14.1 billion, beating expectations, as its smartphone division sales more than doubled. Nikkei slips 1.3% Japan's benchmark Nikkei 225 index widened losses to a fresh one-week low as the yen strengthened against the U.S. dollar. The bounce in oil prices also continued to hit airlines stocks as Japan Airlines and ANA Holdings closed down 5.2 and 1.6 percent each. Power companies, which rely heavily on oil and natural gas, also extended losses. Chubu Electric Power and Tokyo Electric Power (Tokyo Stock Exchange: 9501.T-JP) lost 3.9 and 1.5 percent each. Honda (Tokyo Stock Exchange: 7267.T-JP) was in focus after the Nikkei reported that the carmaker was planning to scale back production at its Suzuka plant by 20 percent. Shares of the Japanese automaker retreated nearly 3 percent. Earnings season continues in Japan, with the likes of Panasonic (Tokyo Stock Exchange: 6752.T-JP) and Sharp (Tokyo Stock Exchange: 6753.T-JP) due to hand in their corporate report cards. Shares of the two electronics majors notched up 0.7 and 5.6 percent.

Read More Next from Samsung: Acurved screen phone? Kospi flat South Korean shares finished modestly lower on Tuesday, recouping some losses from an intra-day low of 1,940 points amid choppy trade.

Kia Motors (Korea Stock Exchange: 27-KR), the country's second-largest automaker, slumped nearly 3 percent after announcing a 1.8 percent on-year drop in sales for the month of January, affected in part by fewer working days at some of its overseas factories. Samsung Electronics (Korea Stock Exchange: 593-KR), the heaviest weighted stock on the Kospi (Korea Stock Exchange: .KS11) index, turned negative to finish 0.2 percent lower, while Hyundai Motor (Korea Stock Exchange: 538-KR), Posco (Korea Stock Exchange: 549-KR) and Kepco made losses between 0.2 to 2.9 percent. The energy sector continued to outperform the bourse in tandem with rising oil prices; S-Oil (Korea Stock Exchange: 1095-KR) elevated 5.5 percent, while petrochemical stock LG Chem and SK Innovation bounced up 1.2 and 3 percent each. Hotel Shilla (Korea Stock Exchange: 877-KR) was the flavor of the day, closing up 4 percent after saying it was interested in acquiring U.S.-based in-flight duty-free retailer DFASS Group.