Hang Seng Index and ASX 200: Stocks Rise on China PMI and RBA Policy Support

US Markets Mixed as Defensive Stocks See Demand

US equity markets were mixed on Monday, March 31. The Dow and the S&P 500 snapped three-day losing streaks, gaining 1.00% and 0.55%, respectively, amid rotation into defensive stocks. In contrast, the Nasdaq Composite Index slipped 0.14%, extending its losing streak to four sessions.

President Trump’s plans to impose auto and reciprocal tariffs by Liberation Day continued to affect risk sentiment. Safe-haven demand pushed 10-year US Treasury yields lower, while gold climbed to a new record high of $3,128.

Asian Market Implications: Asian markets opened higher on Tuesday, April 1, as investors awaited further details of Trump’s tariff plans.

China Manufacturing PMI Points to Front-Running of Tariffs

On April 1, China’s Caixin Manufacturing PMI increased from 50.8 in February to 51.2 in March, driven by a rebound in new orders. New export orders surged, suggesting a potential front-running of anticipated US tariffs.

CN Wire commented on the March PMI survey:

“Surveyed companies attributed the export growth primarily to recovering international demand and an expanding customer base.”

Hang Seng Index Advances on China PMI Optimism

In Asia, the Hang Seng Index gained 1.06% on Tuesday morning. Upbeat PMI data from China boosted demand for Hong Kong and Mainland-listed stocks.

• While the Hang Seng Mainland Properties Index fell 0.17%, the Hang Seng Technology Index jumped 1.82%.
• Alibaba (09988.HK) and Tencent (00700.HK) rallied 2.11% and 2.01%, respectively, contributing to the gains.
• Meanwhile, the auto sector had a mixed session as tariffs loomed. BYD Company Ltd. (01211.HK) fell 0.31%, while Li Auto Inc. (02015.HK) gained 1.16%.

Mainland China’s equities also advanced on upbeat private sector activity. The CSI 300 and Shanghai Composite Index rose 0.29% and 0.59%, respectively.

Nikkei 225 Steadies as Markets Eye US Tariff Clarity

The Nikkei Index gained 0.33% on Tuesday morning despite a firmer Yen, with the USD/JPY down 0.20% to 149.656. Dip buyers returned amid ongoing uncertainties about Trump’s tariff plans.

Tech stocks contributed to the morning gains, with Softbank Group (9984) and Tokyo Electron (8035) rising 0.71% and 0.75%, respectively.

ASX 200 Rises on RBA Decision and Strong Mining Stocks

Australia’s ASX 200 advanced 0.77% on Tuesday. Gains were underpinned by a dovish RBA decision and strong mining and energy stocks.

The RBA kept its cash rate at 4.1% on Tuesday, aligned with market expectations. Notably, the RBA acknowledged a continued easing in underlying inflation, supporting a more dovish RBA policy stance.

• Mining Stocks: BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) rose 1.88% and 1.10%, respectively, on China’s upbeat PMI data.
• Gold and oil stocks also trended higher: Northern Star Resources Ltd. (NST) and Woodside Energy Group Ltd. (WDS) posted gains of 0.52% and 1.71%, respectively.

Outlook: Tariff Risks and Central Bank Signals in Focus

Tariff developments and central bank signals remain key market drivers. Escalating trade tensions could dampen sentiment, though China may respond with additional stimulus.

Investors should also monitor central bank commentary, especially as US inflation trends upward.

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