Asian stocks rise on Chinese stimulus; Australia lags ahead of RBA By Investing.com

Investing.com– Most Asian stocks were higher on Tuesday, with Chinese markets leading gains on reports of more stimulus from Beijing, while Australian markets lagged ahead of the Reserve Bank meeting.

Regional markets took some positive cues from slight overnight gains on Wall Street, with US markets remaining in the sights of record highs. But Wall Street futures retreated in Asian trade, suggesting a recent rally may now be stalled.

Most Asian markets were enjoying strong gains last week as investors cheered a blistering rate cut by the Federal Reserve. This week focuses on several cues from the Fed and the US economy.

Chinese stocks rise on stimulus

China’s and indices rose 0.5% and 0.7% respectively, while Hong Kong’s index rose 1.8% and was the best performer in Asia.

Chinese officials unveiled a series of measures planned to further boost economic growth, with the People’s Bank set to cut reserve requirements for banks by 50 basis points to unlock more liquidity.

For the struggling housing market, the government said it would cut mortgage rates on existing loans. Bloomberg reported that the government plans at least 500 billion yuan ($70.8 billion) of liquidity support for local stocks.

Tuesday’s moves came after the PBOC cut the short-term repo rate on Monday to further boost liquidity. The moves are aimed squarely at supporting economic growth as China’s economy struggles with lingering disinflation and a broad downturn in the housing market.

The CSI300 and SSEC have both hit near eight-month lows in recent sessions, while the Hang Seng has also seen recent losses.

Broader Asian markets advanced. Japan’s index rose 0.8 percent, while adding 0.5 percent, as purchasing managers’ index data showed the country’s index rose more than expected in September.

But the Japanese shrank for the third consecutive month.

South Korea traded flat, while India index futures point to a slightly weak open, with the index facing resistance up to 26,000 points.

Australian shares trail RBA on tap

Australia was the worst performer in Asia, losing 0.5 percent ahead of a Reserve Bank of Australia meeting later in the day.

The RBA is widely expected to , but is also set to strike a hawkish chord amid sticky inflation in Australia and strength in the labor market.

The central bank is likely to signal that interest rates will remain high for longer and is also expected to reiterate its warning about future rate hikes.

Inflation data due on Wednesday will provide more clues on the Australian economy.