South Korea stocks lead gains as most Asia markets rise; Reserve Bank of Australia hikes rates

SINGAPORE — Shares in the Asia-Pacific mostly rose on Tuesday as the Reserve Bank of Australia hiked interest rates in line with expectations.

South Korea's Kospi increased 1.8% to close at 2,341.78, and the Kosdaq advanced 3.9% to 750.95. SK Hynix jumped 3.82% while Naver rose 3.4%.

The Nikkei 225 in Japan gained about 1% to close at 26,423.47, while the Topix index rose 0.5% to1,879.12.

Hong Kong's Hang Seng index pared earlier gains to rise 0.43% in its final hour of trade.

In Australia, the S&P/ASX 200 was 0.25% higher at the close at 6,629.3.

The Reserve Bank of Australia raised interest rates by 50 basis points to 1.35% today as predicted. The Australian dollar fell after the RBA decision was announced, and last traded at $0.6854.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.58%.

Mainland China markets bucked the trend. The Shanghai Composite closed fractionally lower at 3,403.57, and the Shenzhen Component was down 0.408% at 12,973.11.

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 105.163.

The Japanese yen traded at 136.21 per dollar, after briefly weakening past 137 against the greenback last week.

U.S. crude futures gained 1.4% in Asia's afternoon trade to $109.95 per barrel, while Brent crude futures fell 0.19% to $113.29 per barrel.