Asian markets rise as bets on rate cuts increase

Tuesday's advances in most Asian equities followed those on Wall Street as anticipation for a September interest rate decrease increased. However, Chinese markets underperformed due to worries about a slowing economy and political challenges in the United States.

Regional markets benefited from Wall Street's strong close, as dovish remarks by Federal Reserve Chair Jerome Powell indicated the Fed was becoming more confident that inflation was abating.

Stock markets were also helped by increased speculation regarding the Donald Trump administration, as investors anticipated more lax regulations.

The Shanghai Composite and Shanghai Shenzhen CSI 300 indices in China traded in a flat-to-low range.

Given that the previous president has continued to use harsh words against China, speculation about Trump running for a second term hurt Chinese markets. During his administration, Trump placed high tariffs on China, which led to a protracted trade spat between Beijing and Washington in the latter part of the 2010s.

In the 2024 presidential contest, Trump appeared to be gaining the upper hand over President Joe Biden, particularly after the latter's popularity seemed to soar following a botched assassination attempt on Trump.

On Monday, Trump formally announced his candidature as the Republican nominee for president, selecting Ohio Senator J.D. Vance to be his running mate.

Fears of a fresh trade war with the West had already sent Chinese equities plunging, as the European Union had joined the United States in placing heavy import duties on vital industries.

The poor GDP figures for the second quarter, which was revealed on Monday, further soured international perception of China.

In the midst of mounting pressure on Beijing to provide further stimulus, attention is currently focused on the Chinese Communist Party's ongoing Third Plenum.

Key Events Today:

• US retail sales data
• Canada’s CPI data

(Sources: investing.com, reuters.com)