Asian Markets Mixed Amid Chinese PMIs, RBA Rate Hold

Most Asian stocks traded in a narrow range on Tuesday as mixed business activity data from China tempered investor sentiment, while Australian shares remained largely flat after the Reserve Bank of Australia (RBA) held interest rates steady but signaled caution over persistent inflation.

Markets drew some support from Wall Street, which ended higher overnight on strength in technology stocks, but fears of a U.S. government shutdown and new trade tariffs on lumber and wood products announced by President Donald Trump limited broader gains.

In China, the Shanghai Composite and Shenzhen Component rose 0.2% and 0.4% respectively, while Hong Kong’s Hang Seng slipped 0.2%. Government PMI data showed a contraction for the sixth consecutive month and slowing growth, although private sector PMIs indicated the fastest expansion in six months, highlighting differing trends across regions and sectors. Analysts noted that weak government PMIs may prompt further stimulus measures and monetary easing from Beijing.

Australia’s ASX index was flat as the RBA left rates unchanged, citing sticky inflation and a cooling labor market. The central bank has cut rates by 75 basis points so far in 2025 but indicated that more time is needed to assess the impact of earlier cuts. Analysts suggest that policy easing may resume in the near term amid subdued economic activity.

Elsewhere in Asia, Japan’s Nikkei 225 gained 0.1%, while broader indexes added 0.4% following a soft start to the week, although export-heavy sectors faced pressure due to resilience in the yen.