Asian Stock Markets Rise on U.S. Tariff Relief, But China Lags Amid Stimulus Silence

U.S. Auto Tariff Easing Fuels Asian Equity Optimism

Most major Asian stock markets advanced on Tuesday, buoyed by optimism across the automotive sector after the U.S. government moved to soften the impact of its automotive tariffs. However, mainland Chinese equities diverged from the regional rally, slipping slightly as Beijing refrained from announcing fresh stimulus.

Markets reacted favorably to a Wall Street Journal report confirming that the Trump administration plans to ease certain duties on foreign components used in domestic car manufacturing. The adjustment shields automakers from compounded levies, especially those related to steel and aluminum — a move seen as a partial reprieve for global carmakers with integrated supply chains.

South Korea's KOSPI rose 0.8%, supported by a 1.7% gain in Hyundai Motor (KS:005380). Hong Kong's Hang Seng index added 0.5%, led by Chinese EV makers — NIO Inc (HK:9866) jumped 5%, and Geely Automobile (HK:0175) rose 2.5%.

In India, Nifty 50 futures gained 0.3%, while futures on Japan's Nikkei 225 also rose 0.3%, reflecting positive sentiment ahead of the market's reopening after a public holiday.

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BOJ Meeting Looms as Japan Watches Global Shifts

While Japanese markets remained closed on Tuesday due to a national holiday, expectations are building ahead of the Bank of Japan's two-day policy meeting beginning Wednesday. Despite robust inflation figures, consensus suggests the central bank will keep rates steady on May 1, citing global volatility and a need for policy continuity.

The Nikkei's anticipated post-holiday move will be closely watched, especially given its weighting toward auto stocks such as Toyota and Honda — beneficiaries of reduced U.S. tariff burdens.

Meanwhile, Australia's S&P/ASX 200 rose 0.9%, and Singapore's Straits Times index gained 0.4%, reflecting broad-based regional optimism outside of mainland China.

China Stocks Slip as Stimulus Expectations Fade

In contrast to the regional gains, China's Shanghai Composite fell 0.1%, and the CSI 300 dipped 0.2%. This tepid performance came despite improved trade rhetoric from U.S. Treasury Secretary Scott Bessent, who emphasized Washington's openness to dialogue and urged Beijing to lead de-escalation efforts.

The muted response signals investor frustration over Beijing's hesitance to unveil new economic stimulus measures, particularly as domestic growth shows signs of plateauing. In the absence of bold fiscal or monetary action, investor appetite for mainland equities remains fragile.

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Conclusion: Tariffs Down, Uncertainty Lingers

While U.S. tariff adjustments breathed life into Asian auto stocks, the divergence between Hong Kong, South Korea, and China underscores the complex cross-currents driving regional equities. As investors await signals from the Bank of Japan and China's policymakers, near-term momentum appears skewed toward markets positioned to benefit from global supply chain repricing.=