South Korea stocks lead broad gains in Asia; Reserve Bank of Australia decision ahead

SINGAPORE — Shares in the Asia-Pacific mostly traded higher as investors look ahead to the Reserve Bank of Australia’s rate decision.

South Korea’s Kospi increased 1.13%, and the Kosdaq advanced 2.96%. SK Hynix jumped 3.25% while Naver rose 3.19%.

The Nikkei 225 in Japan gained 0.67%, while the Topix index rose 0.2%.

Hong Kong’s Hang Seng index pared earlier gains to rise 0.57%.

In Australia, the S&P/ASX 200 was 0.22% higher.

The Reserve Bank of Australia is expected to raise interest rates by 50 basis points later today, a Reuters poll predicted.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.33%.

Mainland China markets bucked the trend. The Shanghai Composite slipped 0.19%, and the Shenzhen Component was down 0.7%.

U.S. Treasury Secretary Janet Yellen and China’s Vice Premier Liu He held a virtual call on Tuesday to discuss macroeconomic issues.

Elsewhere in the region, South Korean data released Tuesday showed the consumer price index in June rose 6% compared with the same period a year ago. That is slightly higher than the expected 5.9% increase and the fastest annual rise since November 1998, according to Reuters.

“Price pressures and a hawkish U.S. Fed, at a time when South Korea’s balance of payments is under pressure, strengthens the case for a 50bp rate hike at the [Bank of Korea’s] meeting on 13 July,” ANZ economist Krystal Tan wrote in a note on Tuesday.

Japan’s services activity expanded at the fastest pace since October 2013, according to the final au Jibun Bank Japan Services Purchasing Managers’ Index. The print rose to 54, compared to 52.6 in May.

The 50-point mark separates growth from contraction on a monthly basis.

China’s service sector activity also grew, according to the Caixin services purchasing managers’ index. The index rose to 54.5 in June compared to 41.4 in May as Covid measures were eased.

In company news, a group of lawmakers in the U.K. are reportedly calling for a ban on Chinese CCTV makers Hikvision and Dahua over alleged links to human rights abuses.

U.S. markets were closed overnight for a holiday.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.137.