Shares of South Korean auto manufacturers surged on Tuesday after U.S. Secretary of Commerce Howard Lutnick confirmed the retroactive implementation of reduced auto tariffs for South Korea, set to take effect from November 1. The announcement included a reduction of tariffs on airplane parts and an adjustment to align Korea’s reciprocal tariff rates with those of Japan and the EU. Following this news, shares of Hyundai Motor rose by nearly 5%, while Kia Corp saw a 3% uptick. The broader South Korean stock market reflected this positive sentiment, with the Kospi index climbing by 1.02%, although the smaller Kosdaq experienced a slight decline of 0.13%.
In parallel, South Korea’s inflation rate for November rose by 2.4% year-on-year, surpassing the 2.35% growth predicted by economists in a recent Reuters poll. Core inflation, which excludes volatile fresh food and energy prices, held steady at 2%. This sustained inflation rate supports the Bank of Korea’s decision to maintain interest rates at 2.5% for the fourth consecutive meeting last Thursday.
Across the Asia-Pacific region, major benchmark indexes were mostly in the green. Japan’s Nikkei 225 index gained 0.54%, driven by strong performances in the financial, energy, and basic materials sectors. Notable gainers included industrial robot manufacturer Fanuc, which rose by 5.86%, and NGK Insulators, which saw a 6% increase. The yield on 10-year Japanese Government Bonds surged to 1.88%, the highest level since June 2008, fueling speculation about potential interest rate hikes by Japan’s central bank this month. Meanwhile, the yields for 20-year and 30-year JGBs also reached multi-decade highs.
Australia’s ASX/S&P 200 index climbed 0.12%, while Hong Kong’s Hang Seng Index opened with a 0.49% gain. On the other hand, mainland China’s CSI 300 witnessed a slight decline of 0.17%. In Hong Kong, shares of Alibaba Group increased by nearly 3%, marking a three-day growth streak following the launch of its Quark artificial intelligence glasses in China.
In India, the Nifty 50 opened lower by 0.22%, and the BSE Sensex decreased by 0.37%. The decline was notably influenced by Bajaj Housing Finance, which dropped over 8% after its parent company, Bajaj Finance, announced plans to offload up to 2% of its stake in the subsidiary.
In the U.S., equity futures exhibited little change during Asian trading hours after all three major benchmarks ended a five-day winning streak, impacted by a significant sell-off in cryptocurrency markets. The S&P 500 decreased by 0.53%, settling at 6,812.63, while the Nasdaq Composite fell by 0.38%, ending at 23,275.92. The Dow Jones Industrial Average saw a decline of 427.09 points, or 0.9%, closing at 47,289.33. Overnight, Bitcoin experienced a sharp drop of around 6%, trading below $86,000, adding downward pressure on market sentiment. The digital currency struggled to maintain levels above $90,000 after a drop below that threshold late last month. Other crypto-related stocks also faced declines, further indicating the impact of the downturn on investor confidence, with artificial intelligence-related shares such as Broadcom and Super Micro Computer losing more than 4% and 1%, respectively.
