Asia markets rise after China cuts lending rates

May 20, 2025 (MLN): Asia-Pacific markets climbed Tuesday as China cut its key lending rates by 10 basis points in a move to boost its economy, at a time when trade tensions threaten to derail growth.

The People’s Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.

Hong Kong’s Hang Seng index rose 1.28%, while mainland China’s CSI 300 added 0.48%.

Japan’s benchmark Nikkei 225 rose 0.45%, while the Topix added 0.32%. South Korea’s Kospi climbed 0.29% while the small-cap Kosdaq jumped 0.62%.

Likewise, Australia’s benchmark S&P/ASX 200 rose 0.39%.

The Reserve Bank of Australia is slated to release its policy rate decision later in the day, as CNBC reported.

Australia’s inflation has been easing, with the most recent headline inflation coming in at a four-year low of 2.4% in the first quarter of 2025.

The Reserve Bank of Australia has emphasized in its previous monetary policy statement that bringing inflation to its 2% to 3% target range sustainably remains its highest priority.

The Commonwealth Bank of Australia expects the RBA to cut the cash rate by 25 basis points to 3.85%.

The RBA said in its previous monetary policy statement that returning inflation sustainably to its target of between 2% and 3% “within a reasonable timeframe” is its highest priority.

Investors are also assessing the world’s largest battery manufacturer Contemporary Amperex Technology which rose over 11% in its Hong Kong trading debut on Tuesday.

Shares were trading at 292 Hong Kong dollars apiece on the Hong Kong stock exchange, compared with the initial public offering price of HK$263 dollars per share. 

U.S. stock futures were little changed. S&P 500 futures rose less than 0.1%. Nasdaq 100 futures were down 0.1%, while futures tied to the Dow Jones Industrial Average added 54 points, or 0.14%.

Overnight stateside, the three major averages closed higher. The S&P 500 posted a slim gain on Monday as Treasury yields came off their highs and investors sought to look past Moody’s downgrade of the United States’ credit rating.

The benchmark added 0.09% and closed at 5,963.60, marking its sixth consecutive winning session.

The Nasdaq Composite inched up 0.02% to end at 19,215.46. The Dow Jones Industrial Average rose 137.33 points, or 0.32%, and settled at 42,792.07.

The 30-stock index was aided by a rebound in UnitedHealth, which saw an 8% jump after a recent bout of hard selling.

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