Asian Shares Advance On China Stimulus Hopes

Asian stocks closed mostly higher on Tuesday despite uncertainty over the future trajectory of the Federal Reserve’s interest rate hikes and growing risks of a U.S. recession.

Gold gained as the dollar paused after a three-day rally. Oil prices moved higher in Asian trading on expectations that Beijing may take steps to stimulate the economy.

Chinese shares ended flat, with the Shanghai Composite Index finishing marginally lower at 3,313.57 amid soaring tension between China and Taiwan following the Taiwanese president’s visit to the U.S.

The U.S. and the Philippines are holding their largest combat drills in decades after China conducted mock air and sea attacks off the coast of Taiwan.

Hong Kong’s Hang Seng Index climbed 0.8 percent to 20,485.24 as investors reacted to soft inflation data from China.

China’s consumer inflation hit an 18-monht low in March and producer price deflation deepened further, creating room for the central bank to potentially ease its monetary policy.

Japanese shares rallied on dovish comments from the nation’s new central bank governor and reports suggesting that billionaire investor Warren Buffett intends to add to his investments in Japan.

Bank of Japan Gov. Kazuo Ueda indicated late Monday that he intends to continue the current easy monetary policy, including the so-called yield curve control (YCC) program.

The Nikkei 225 Index gained 1.1 percent to settle at 27,923.37, while the broader Topix closed 0.8 percent higher at 1,991.85.

Tech stocks led the surge, with Tokyo Electron and Advantest climbing 3.7 percent and 2 percent, respectively.

Seoul stocks extended gains for a third day running, led by chemical and auto shares.

The Kospi jumped 1.4 percent to close at 2,547.86 as the Bank of Korea held its key interest rate steady at 3.5 percent for the second straight time, as widely expected, amid signs of easing inflation and rising concerns over an economic slowdown.

LG Energy Solution rose 2.4 percent and its parent LG Chem surged 7.5 percent on growing expectations the companies will benefit from a new U.S. law on giving subsidies to electric vehicle buyers.

Automaker Hyundai Motor rallied 3.3 percent and its affiliate Kia Corp. added 4.9 percent on a positive earnings outlook for this year.

Australian markets advanced amid broad-based gains as traders returned to their desks after a long holiday weekend.

The benchmark S&P/ASX 200 Index shot up 1.3 percent to 7,309.90, while the broader All Ordinaries Index ended 1.2 percent higher at 7,504.20.

Gold miner Newcrest Mining surged 5.2 percent after receiving a sweetened offer from Newmont Corp.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 Index finished marginally higher at 11,873.58 on expectations the country’s central bank may raise interest rates by 25 basis points in May before pausing for the remainder of the year.

U.S. stocks ended mixed overnight, and the dollar rose as markets contended with uncertainty around the Fed’s actions following last week’s monthly jobs report.

The Dow rose 0.3 percent and the S&P 500 inched up 0.1 percent, while the tech-heavy Nasdaq Composite ended flat with a negative bias.

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