Asian Shares Extend Gains Amid Fed Rate Cut Hopes

(RTTNews) - Asian stocks rose for a second consecutive session on Tuesday after a Federal Reserve official said the time is nearing for rate cuts.

Tech shares drove the rally after data intelligence group Palantir boosted its 2025 outlook and said its sales jumped almost 50 pe cent in the second quarter amid robust demand for artificial intelligence services.

The dollar remained weak near a one-week low in Asian trade and gold was little changed at $3,373 per ounce while oil extended losses on concerns of oversupply.

Chinese and Hong Kong markets extended gains from the previous session as a survey showed strong recovery in China's services activity in July, with growth hitting a 14-month high on export demand.

China's Shanghai Composite index climbed 0.96 percent to 3,617.60 while Hong Kong's Hang Seng index gained 0.68 percent to close at 24,902.53.

Japanese markets advanced as new data showed service sector activity in the country rose at the fastest pace in five months in July.

The Nikkei average rose 0.64 percent to 40,549.54 despite the yen holding near recent highs amid hints from the Bank of Japan that rate hikes remain on the table. The broader Topix index settled 0.70 percent higher at 2,936.54.

BOJ's June meeting minutes showed that a few board members are in favor of resuming interest rate increases if trade friction de-escalates.

Mitsubishi Heavy Industries jumped 5.7 percent as Australia awarded the company a A$10 billion contract to deliver the first of its new navy frigates.

Technology investor SoftBank Group rallied 2.7 percent but chip-related stocks such as Advantest and Tokyo Electron ended on a subdued note.

Seoul stocks followed Wall Street higher, with the Kospi average finishing 1.60 percent higher at 3,198 led by tech stocks and battery makers. SK Hynix jumped 2.1 percent and LG Energy Solution added 2.9 percent.

Australian markets closed at a record high due to rising bets for rate cuts by the U.S. Federal Reserve and the Reserve Bank of Australia.

Investors also cheered data that showed Australia's services sector growth jumped to a 16-month high in July.

The benchmark S&P/ASX 200 index rose 1.23 percent to 8,770.40 points, the highest-ever closing level led by rate-sensitive banks and real estate stocks.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 index ended up 1.52 percent at 12,877.04.

U.S. stocks rose sharply overnight, reversing the steep losses seen in the previous session on jitters about President Trump's new modified tariff rates.

In economic news, data showed factory orders, a key indicator of the health of the manufacturing sector, fell sharply in June as expected.

The S&P 500 rallied 1.5 percent to snap a four-day losing run amid optimism about interest-rate cuts. The tech-heavy Nasdaq Composite surged 2 percent and the Dow advanced 1.3 percent.