Asian stocks creep higher as rate cut bets persist; RBA awaited By Investing.com

Investing.com– Most Asian stocks rose on Tuesday amid persistent optimism over an eventual decline in U.S. interest rates, with indexes in Japan and South Korea blazing past their peers in catch-up trade. 

Focus was also on a later in the day, where the central bank is widely expected to keep rates steady but strike a more hawkish tone. 

Regional markets took a positive lead-in from Wall Street, particularly from gains in the technology sector after a swathe of strong first-quarter earnings in recent sessions. 

But U.S. stock index futures fell slightly in Asian trade, while overall gains in regional markets were also limited in anticipation of more cues on U.S. rates, specifically from Federal Reserve officials set to speak later in the week. 

Nikkei, KOSPI surge in catch-up trade 

Japan’s and South Korea’s were the best performers in Asia on Tuesday, rising 1.2% and 1.9%, respectively. 

The two rose in catch-up trade after a long weekend, with their gains coming largely in response to softer-than-expected U.S. data from Friday. Technology stocks were the biggest boosts to the two indexes. 

Friday’s payrolls data was a key point of support for Asian markets, as traders began once again pricing in potential interest rate cuts by the Federal Reserve. Traders see a that the Fed will cut rates by 25 basis points in September. 

Gains in other Asian markets were somewhat limited on Tuesday, especially as Fed officials warned that while the central bank will eventually cut rates this year, it still needed more convincing that inflation was coming down. More Fed speakers are also on tap this week. 

ASX 200 gains as falling retail sales undermine hawkish RBA bets 

Australia’s index added 0.4% as weak data for the first quarter showed that domestic spending was slowing- a trend that is expected to factor into softer inflation in the coming months. 

The data spurred some doubts over just how hawkish the Reserve Bank of Australia will be at the conclusion of a policy meeting later in the day, given that spending appeared to be cooling. 

The RBA is expected to leave rates unchanged, but to potentially strike a hawkish tone following hotter-than-expected inflation data for the first quarter. Any hawkish signals from the RBA bode poorly for Australian stocks. 

Some weak earnings also limited gains. ANZ Group (ASX:) fell 0.9% after a middling profit for the six months to March 31. 

Broader Asian markets were muted. A rebound in Chinese shares appeared to be running out of steam, with the and marking small moves after racing to five-month peaks in April.

Hong Kong’s index fell 0.4% after rising for 10 consecutive sessions, which also saw the index enter a bull market from February lows.

Futures for India’s index pointed to a muted open, after the index clocked mild losses in the prior session.