Asian shares gain, Australia cuts rate to record low 0.75%

Shares rose in Asia on Tuesday, with markets in Hong Kong and Shanghai closed for a national day holiday.

The Reserve Bank of Australia followed the lead of the Federal Reserve and other central banks in cutting its key interest rate, to a record low 0.75%. Sydney’s S&P ASX 200 jumped 0.8% to 6,741.10.

Japan’s Nikkei 225 stock index picked up 0.6%, to 21,885.24, despite the release of weak economic data and an increase in the national sales tax that was put off for years out of fears it might stall growth.

The hike in the consumption tax to 10% from 8% is needed to help repair national finances as the government contends with steep increases in costs for elder care as the Japan’s population shrinks and ages. But past tax hikes have pushed the economy into recession and this one comes at a time when growth has already been hit by the trade war between the U.S. and China.

Elsewhere in Asia, India’s Sensex climbed 0.2% to 38,751.77 while the Kospi in South Korea climbed 0.4% to 2,070.62. Shares rose in Taiwan and Singapore but fell in Jakarta and Bangkok.

Overnight, U.S. stocks climbed as investors were encouraged by China’s announcement that its top trade negotiator will lead talks with the United States that are expected to take place next week. The Trump administration also calmed some worries that it may limit U.S. investment in Chinese companies.

Those developments buoyed technology stocks that rely on China as both a customer and a supplier. The S&P 500 climbed 0.5% to 2,976.74, gaining 1.2% for the quarter.

The Dow Jones Industrial Average rose 0.4% to 26,916.83 and the Nasdaq composite added 0.8% to 7,999.34.

Trump shocked markets in August when he said he’d raise tariffs on Chinese goods, and the announcement sent stocks and bond yields reeling. The S&P 500 dropped more than 6% in the weeks following July 26, when it set its last record. But stocks began climbing again in September as both sides made conciliatory moves to ease tensions.

Still, a slew of uncertainties, including the impeachment inquiry into Trump, have left businesses reluctant to spend due to the trade war.

In the next few weeks, companies are scheduled to tell investors how much profit they made during the third quarter. Expectations are generally low again, with analysts forecasting a drop of nearly 4% from a year ago.

Benchmark U.S. crude added 38 cents to $54.45 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.84 to settle at $54.07 per barrel Monday. Brent crude, the international standard, gained 32 cents to $59.57 per barrel. It fell $1.13 to $60.78 a barrel in London.

The dollar rose to 108.26 Japanese yen from 108.09 yen on Monday. The euro weakened to $1.0883 from $1.0900.